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Central  University  Library 

University  of  California,  San  Diego 
Please  Note:  This  item  is  subject  to  recall. 

Date  Due 

nFH  1  6  1993 

jaa'd  APR  2  6*94 

CI  39  (7/93)                                                                 UCSDLi). 

Sincerely  yours, 

Lee  Francis  Lybarger. 


TARIFF  PRIMER 


A  GRAPHIC  PRESENTATION 
OF  THE 

FORDNEY-McCUMBER  TARIFF 


WHAT  IT  IS 

HOW  IT  WORKS 

WHOM  IT  BENEFITS 

—BY- 
LEE  PRANCIS  Ly?AR.GER 


Member  of  the  Hhiiadelph'a  3ar. 
Lyceum   and  GhHutaadua  ^--epturer. 

Formerly  President  Inter- 
national  Lyoei'm    pnd    ChartauQua 
Atsociaiiou  of  A'nerica. 


Illustrations  by  John  H.  Coakley 


TARIFF  PUBLISHING  COMPANY 
1819  BROADWAY,  NEW  YORK 


Hobson  Printiiur  Company 
Eaatoo,  Pa. 


Gopyighted,  October,  1922'.- 
By.  Lee  Francis  .Ly^arger. 


DEDICATED 

TO  THE  RIGHT 

OF  THOSE  WHO  LABOR 

IN  ALL  LANDS  AND  CLIMES 

TO  SELL  THE  PRODUCTS  OF  THEIR  LABOR 

WHERE  THEY  CAN  SELL  THE  DEAREST 

AND  BUY  WITH  THEIR  WAGES 

WHERE  THEY  CAN  BUY 

THE  CHEAPEST 


PREFACE 

Can  a  people  be  enriched  by  their  own  taxation?  That  is  the 
question  now  confronting  the  American  people. 

If  a  people  can  be  enriched  by  the  simple  process  of  taking 
hundreds  of  millions  of  dollars  annually  out  of  the  pockets  of 
the  Many,  and  pouring  them  into  the  huge  pockets  of  the 
Privileged  Feic,  then  the  Fordney-McCumber  Tariff  is  the 
most  beneficient  piece  of  legislation  in  the  History  of  the  Re- 
public. If  it  be  true  that  a  people  can  be  prospered  by  so 
simple  a  method,  then  will  the  new  Tarifi  lift  our  toiling  mill- 
ions out  of  the  perils  of  penury  and  want,  up  into  the  happy 
realm  of  abundance. 

Were  the  Tariff  Issue  so  clear  and  definite  as  above  stated,  it 
would  of  course  have  disappeared  long  ago  from  our  political 
history.  No  question  about  that.  But  it  is  not.  On  the  con- 
trary, it  is  an  issue  so  complex  and  involved,  so  mixed  up  and 
confused  by  the  multiplied  relations  sustained  even  by  the 
average  citizen  in  the  complex  financial  and  industrial  life  of 
today,  that  after  generations  of  discussion,  we  know  but  little 
more  about  the  Tariff  than  we  did  at  the  beginning. 

The  heroic  and  independent  spirit.-  of  our  "Sires  of  '76", 
would  not  have  considered  the  toleration  of  so  monstrous  and 
extortionate  a  measure  as  the  Fordney-McCumber  Tariff  for  a 
single  minute.  Their  fight  was  against  Taxation :  we  fight/or  Tax- 
ation. 

But  the  real  facts  in  the  case — and  the  dire  consequences  to 
the  consuming  public — were  far  easier  to  see  then  than  they 
are  today.  Amidst  the  complexities  of  our  modern  civilization, 
the  fact  as  to  who  pays  and  who  gets — as  to  who  are  the  Tariff's 
beneficiaries  and  who  its  victims — can  now  be  disguised,  con- 
fused and  hidden  in  a  thousand  different  ways. 

The  Author's  interest  in  this  subject  began  far  back  in  boy- 
hood days,  when  a  student  in  the  High  School.  More  years  of 
my  life  have  been  given  to  the  study  of  the  theory  and  the 
effects  of  a  Protective  Tariff — and  of  that  universal  thing, 
called  Trade,  which  the  Tariff  seeks  to  obstruct— than  to  any 
other  one  problem  connected  with  the  general  welfare. 


Added  to  these  years  of  study  and  investigation  has  been  the 
advantage  of  presenting  the  Tariff  to  Lyceum  and  Chautauqua 
audiences — composed  of  men,  women  and  children.  Long  ago, 
from  this  most  valuable  experience,  I  learned  that  the  thing 
most  needed  by  the  people  in  order  to  understand  just  what  the 
Tariff  is,  how  it  works,  and  whom  it  benefits,  is  not  Argument 
but  Analysis — a  division  into  classes  of  the  persons  and  things 
affected  at  each  step  in  the  unfolding  of  the  problem. 

The  sole  aim  and  purpose  of  the  TARIFF  PRIMER  is  to  clarify 
and  simplify  the  Tariff  Issue.  The  method  of  working  has 
been  simply  to  analyze,  and  then  classify  in  opposite  groups, 
all  the  elements  in  each  stage  of  the  problem — taking  them  up 
carefully,  just  one  at  a  time.  A  classification  once  made,  or  a 
principle  once  clearly  established,  is  never  abandoned.  From 
the  beginning  to  the  end  of  the  book  I  trust  the  reader  will  find 
that  all  the  lines  of  reasoning  run  clear  and  straight.  My 
endeavor  has  been  to  fully  and  logically  tJiink  out  each  problem 
for  itself;  seeking  always  to  find  the  principle  involved,  using 
details  and  statistics  only  for  illustration. 

Thus  do  we  advance  steadily  from  the  first  chapter  to  the 
last,  following  the  definite  plan  of  taking  up  and  discussing  just 
one  thing  at  a  time,  always  striving  to  so  clearly  and  definitely 
state  facts  and  conditions  that  the  reader  can  think  them  out 
for  himself — and  find  pleasure  and  entertainment  in  doing  it. 

The  cartoons  and  illustrations  have  been  carefully  designed 
in  order  to  give  the  reader  the  imagery,  the  mental  pictures, 
the  concrete  symbols,  absolutely  necessary  for  the  mastery  of 
the  subject.  Realizing  that  at  least  80%  of  all  our  knowledge 
comes  thru  the  eyes,  an  abundance  of  charts  and  diagrams  has 
also  been  used,  based  wholly  on  Official  Government  Statistics. 

With  all  the  vital  questions  and  problems  of  the  Tariff  Issue 
clearly  analyzed  and  definitely  stated  for  the  American  people, 
this  age-long  superstition,  this  gigantic  delusion  that  a  people 
can  be  enriched  by  their  own  taxation,  will  go  the  way  of  all 
the  other  delusions  and  superstitions  of  the  past. 

Mifilinburg,  Pa. 
October  12,  1922. 


TABLE  OF  CONTENTS 

CHAPTER  I.  Home  Goods,  Foreign  Goods  and  the  Tariff  Wall  1 

CHAPTER  II.  Motive  that  Builds  Tariff  Walls 4 

CHAPTER  III.  The  World  Price  Level  and  the  TariflF  Price  Level  7 

CHAPTER  IV.  Putting  Foreign  Goods  Over  the  Tariff  Wall ...  11 

CHAPTER  V.  Price-Fixing  Inside  the  Tariff  Wall 13 

CHAPTER  VI.  Monopolizing  the  Home  Market 17 

CHAPTER  VII.  How  Much  Is  the  Tariff  Tax? 20 

CHAPTER  VIII.  Where  the  Tariff  Costs  More  Than  the  Goods  23 

CHAPTER  IX.  Does  the  "Foreigner"  Pay  the  Tariff? 25 

CHAPTER  X.  Two  Streams  of  Revenue 29 

CHAPTER  XI.  The  Higher  the  Rate— The  Less  the  Revenue . .  32 

CHAPTER  XII.  Who  Gets  It— Employees  or  Employers? 35 

CHAPTER  XIII.  Does  the  Tariff  Protect  or  Plunder  Labor? 40 

CHAPTER  XIV.  The  Farmer  and  the  Manufacturer 44 

CHAPTER  XV.  The  Farmer  as  an  Exporter 49 

CHAPTER  XVI.  Can  the  Farmers  Form  a  Trust? 53 

CHAPTER  XVII.  Does  the  Importation  of  Foreign  Goods  Throw 

Our  Own  Labor  Out  of  Employment? 57 

CHAPTER  XVIII.  Can  We  Import  Without  Exporting? 61 

CHAPTER  XIX.  Our  "Favorable"  Balance  of  Trade 65 

CHAPTER  XX.  My  Two  Islands 71 

CHAPTER  XXI.  Revenue  Tariffs  vs.  Protective  Tariffs 79 


APPENDIX 

A— Imports  and  Exports  from  1790  to  1921 82 

B — A  Study  in  World  Commerce 89 

C— Effects  of  War  on  Prices 91 

D— Price  History  from  1850  to  1920 93 

E — Tariff  Rates  from  Custom  House  Reports 95 

F — 25  Leading  Products  Both  Exported  and  Imported 96 

G— Fordney  Tariff  at  Work   96 

H— Wool  Prices  from  1880  to  1921 96 

I — Payne-Aldrich,  Underwood  and  Fordney  Tariffs 97 

J— The  Scramble  Begins  for  Still  Higher  Rates 100 


CHAPTER  I. 
Home  Goods,  Foreign  Goods  and  the  Tariff  Wall 

For  untold  centuries  the  word  "foreign"  has  filled  mankind 
with  fear,  because  "foreigner"  and  "foe"  meant  the  same  thing. 
And  the  fear  that  there  was  some  subtle  danger,  some  hidden 
evil,  even  in  "foreign  goods"  has  continued  through  all  the  long 
and  bloody  centuries  of  war  and  hate  and  strife.  This  vague 
fear  and  indescribable  dread  of  "foreign  goods"  still  exists — 
and  that,  too,  among  so-called  "civilized"  nations.  If  this  were 
not  true.  Protective  Tariffs  would  have  disappeared  long  ago 
with  the  other  superstitions  of  the  past. 

On  the  opposite  page  our  artist  has  given  us  the  three  ele- 
ments essential  to  a  complete  discussion  of  the  Tariff.  In  this 
picture  we  have  the  whole  foundation  of  the  subject.  These 
three  elements  are:  Home  Goods,  Foreign  Goods,  and  the 
Tariff  Wall  between. 

_  Radical  and  far-reaching  as  is  the  distinction  which  all  na- 
tions make  between  Home  Goods  and  Foreign  Goods,  and  pro- 
foundly as  does  this  distinction  effect  the  economic  welfare  and 
happiness  of  all  mankind,  yet  the  reader  needs  to  realize  at  the 
very  outset  that  it  rests  upon  nothing  more  permanent  and  sub- 
stantial than  national  boundaries.  On  this  boundary  all  Tariff 
Walls  are  built.  National  boundaries  are  wholly  a  matter  of 
accident  and  chance,  of  whim  and  caprice,  of  war  and  treaty. 
As  we  learned  in  geography,  national  boundaries  are  not 
"natural"  lines  but  "imaginary"  lines  drawn  upon  the  surface 
of  our  earth. 

The  49th  parallel  of  latitude  forms  the  larger  part  of  the 
boundary  which  separates  us  from  Canada.  All  products 
coming  in  from  beyond  that  parallel  are  "foreign",  and  if 
allowed  to  come  in  "free"  it  is  supposed  would  destroy  our 
great  agricultural  interests.  By  all  means  wheat  from  Alberta 
must  be  kept  out.  For  twenty-four  years  has  Mr.  Porter  J. 
McCumber  been  defending  North  Dakota  from  the  disasters 
of  such  an  "invasion". 

And  yet  the  political  slogan  of  an  early  Presidential  cam- 
paign was:  "54-40  or  Fight!"  They  did  not  get  either.  But 
if  the  parallel  of  54-40  had  been  established  as  our  northern 


2  TARIFF  PRIMER 

boundary,  the  wheat  fields  of  Alberta  and  of  all  northwestern 
Canada,  would  now  pour  their  golden  harvests  into  the  gran- 
aries of  Chicago  and  Minneapolis  as  freely  as  do  the  wheat 
fields  of  the  Dakotas  and  Minnesota.  What  makes  it  injurious 
in  the  one  case,  but  beneficial  in  the  other?  Merely  the  acci- 
dental location  of  a  national  boundary.  Therefore,  it  is  not  the 
nature  of  the  goods,  or  the  character  of  the  people  producing 
them,  but  those  "imaginary  lines",  called  national  boundaries, 
which  divide  all  the  products  of  human  toil  into  Home  Goods 
and  Foreign  Goods. 

We  are  not  the  only  people  who  have  a  Tariff  Wall,  though 
from  Protectionists'  speeches  in  Congress,  one  would  infer  that 
this  is  our  distinctive  and  exclusive  creation.  There  are  as 
many  Tariff  Walls  on  this  planet  as  there  are  Governments. 
Canada,  Mexico,  the  Republics  of  Central  America  and  the 
countries  of  South  America — all  have  Tariff  Walls.  Crossing 
the  ocean.  Tariff  Walls  and  lines  of  fortification  mark  the  bound- 
aries of  all  the  countries  of  Europe.  Every  government  on  the 
continent  of  Africa  is  encircled  by  a  Tariff  Wall.  The  same  is 
true  of  Asia,  of  the  distant  Orient,  and  of  many  of  the  islands 
of  the  sea.  In  short,  wherever  there  is  a  Government  on  this 
earth  there  also  is  a  Tariff  Wall. 

Nor  is  that  all.  "We  the  people  of  the  United  States",  now 
have  but  one  Tariff  Wall.  But  before  the  formation  of  the 
Federal  Constitution  in  1789,  each  of  the  thirteen  colonies  had 
a  Tariff  Wall  around  it.  Connecticut,  Massachusetts,  New 
York,  Pennsylvania,  North  Carolina — all  had  Tariff  Walls. 
Wherever  there  was  a  boundary  line  separating  two  colonies, 
there  also  was  a  Tariff  Wall. 

How  history  does  persist  in  enacting  over  and  over  again  its 
ancient  follies!  The  same  bickering  and  haggling  and  "log- 
rolling" which  occupied  the  American  Congress  for  nearly  two 
years;  also  occupied  the  legislatures  of  the  Colonies.  Further- 
more, the  same  "arguments"  which  seek  to  justify  the  exist- 
ence of  the  one  Tariff  Wall  around  the  entire  Union  of  48  states, 
would  also  justify  the  building  of  a  Tariff  Wall  around  each 
state.  Therefore,  if  these  "arguments"  of  Fordney,  McCumber 
and  their  followers  are  true,  then  we  should  have  48  Tariff 
Walls  instead  of  one! 

In  Europe,  a  century  or  so  ago,  there  was  a  Tariff  Wall 
around  each  county,  principality,  dukedom,  and  feudal  estate. 
It  is  said  that  a  French  peasant  in  going  from  Versailles  to  Paris 
with  his  cartload  of  garden  products  had  to  pass  through  eigh- 


Home  Goods,  Foreign  Goods  and  the  Tariff  Wall  3 

teen  Tariff  Walls,  paying  toll  at  each  wall,  before  he  reached 
the  gates  of  Paris — and  still  had  one  more  toll  to  pay  before  he 
could  get  inside  the  Tariff  Wall  around  that  city!  And  so  the 
idea  is  not  modern.     It  is  centuries  old. 

Senator  Calder,  of  New  York,  recently  claimed,  before  a 
labor  audience,  that  the  reason  wages  are  higher  in  this  country 
than  in  any  other  is  because  we  have  a  Protective  Tariff — im- 
plying, of  course,  that  other  countries  have  not.  Nothing 
more  ignorant  or  deceptive  could  possibly  have  been  uttered. 
Whatever  the  reason,  it  is  not  this.  Practically  all  countries 
on  earth  have  a  Protective  Tariff.  And  statistics  show  that, 
as  a  general  rule,  the  higher  the  Tariff  the  lower  the  wages  of 
labor,  and  the  more  impoverished  the  people. 

Thus  do  Tariff  Walls,  separating  Home  Goods  from  Foreign 
Goods,  exist  everywhere — and  have  existed  for  centuries. 
They  are  as  universal  as  greed;  as  persistent  as  Selfishness  and 
Plunder. 


4  TARIFF  PRIMER 

CHAPTER  II. 
MOTIVE  THAT  BUILDS  TARIFF  WALLS 

In  the  lowest  stages  of  human  society  all  the  products  which 
enter  into  the  food,  clothing  and  shelter  of  the  people  of  the 
tribe  are  found  within  the  narrow  circuit  of  their  own  immedi- 
ate neighborhood.  And  nothing  better  indicates,  the  steps  in 
the  Intellectual  Progress  of  the  race  than  the  ever  increasing 
distance,  over  sea  and  land,  from  which  their  daily  supplies  are 
drawn.  When  we  reach  the  highest  civilization  we  find  the 
articles  consumed  even  by  "the  common  people"  are  drawn 
from  every  country,  zone  and  clime. 

Thus  does  the  March  of  Progress,  through  the  instrumen- 
tality of  International  Trade,  enable  the  humblest  citizen  or 
subject  in  any  nation  to  levy  upon  the  vast  variety  of  products 
of  every  sea  and  land,  of  every  mountain  range,  valley  and 
plain  of  the  whole  round  earth,  to  satisfy  the  hunger  and  needs 
of  his  life — unless  prevented  by  a  Tariff  Wall. 

Whoever  would  form  a  true  mental  picture  of  Trade  must 
encompass  the  whole  earth  in  his  imagination.  The  compara- 
tively few  whose  intellectual  development  makes  such  a  vision 
possible,  believe  in  Trade.  The  unnumbered  millions  whose 
narrow  and  provincial  minds  make  a  conception  of  such  mag- 
nitude impossible,  believe  in  Tariff  Walls.  It  is  all  a  matter  of 
imagination,  of  mental  capacity — of  Intellectual  Development. 

Back  of  that  towering  Tariff  Wall,  in  every  nation — under 
every  form  of  government — are  two  classes  of  people:  The 
Producers  of  Home  Goods  and  the  Consumers  of  both  Home 
and  Foreign  Goods.  In  this  we  have  the  Motive  which  in  all 
lands  and  nations  builds  Tariff  Walls. 

It  is  quite  natural  for  local  Producers  everywhere  to  object 
to  this  intrusion  of  Foreign  Goods  into  the  Home  Market. 
And  the  cause  of  this  universal — and  we  might  say  interna- 
tional— objection  of  all  local  Producers  to  the  importation  of 
Foreign  Goods  is  easy  to  discover. 

It  is  found  in  the  fact  that  they  must  compete  with  these 
Foreign  Goods  in  what  they  would  like  to  consider  their  own 
exclusive  market.  And  in  order  to  compete  they  must  keep 
their  prices  down  to  the  prices  of  the  Foreign  Goods  offered. 


Motive  that  Builds  Tariff  Walls  5 

Otherwise,  local  consumers  will  naturally,  and  rightly,  buy  the 
Foreign  Goods. 

From  this  vital  fact  comes  a  clear  vision  of  the  purpose,  the 
motive,  the  function,  of  a  Tariff  Wall:  THE  OBJECT  IN  BUILD- 
ING A  TARIFF  WALL  AROUND  ANY  COUNTRY  IS  TO  ENABLE 
LOCAL  PRODUCERS  OF  CERTAIN  PRODUCTS  TO  COMPEL 
THE  LOCAL  CONSUMERS  OF  THESE  PRODUCTS  TO  PAY 
MORE  FOR  THEM  THAN  THEY  WOULD  HAVE  TO  PAY  IN  THE 
OPEN  MARKET. 

In  other  words,  the  Producer  has  carried  his  conflict  with  the 
Consumers  of  his  products  into  the  Halls  of  Congress.  He  has 
succeeded,  by  means  of  campaign  contributions  and  other 
forms  of  "influence,"  in  securing  from  Congress  such  laws- 
called  Tariffs — as  enable  him  to  compel  the  consumers  of  his 
products  to  pay  him  more  than  they  would  otherwise  have  to 
pay — were  it  not  for  these  laws. 

When  we  reflect  on  the  matter,  however,  we  see  that  there 
is  no  more  reason — in  fact,  there  is  not  as  much  reason — why 
the  Producer  should  have  a  law  compelling  the  Consumers  to 
pay  him  more  than  the  Market  Price  for  his  products,  than 
that  Consumers  should  have  a  law  enacted  by  Congress  which 
would  compel  Producers  to  sell  their  products  for  less  than  the 
Market  Price.  Had  you  ever  thought  of  that?  If  not,  then 
here  is  a  chance  to  do  some  real  thinking  for  yourself. 

You  would  not  vote  to  build  a  Tariff  Wall  around  your  town, 
giving  your  merchants  a  monopoly  of  the  Home  Market;  thus 
preventing  you  from  going  to  any  other  town  or  city  to  buy 
any  part  of  the  necessities  of  life.  Nor  would  you  vote  to 
build  a  Tariff  Wall  around  your  county,  or  even  around  your 
state.  Since  you  demand  an  Open  Market  for  the  people  of 
your  town,  an  Open  Market  for  the  people  of  your  county,  and 
an  Open  Market  for  the  people  of  your  state,  why  do  you  not 
also  demand  an  Open  Market  for  the  hundred  and  ten  Million 
people  of  your  nation? 


The  World  Price  Level  and  the  Tariff  Price  Level  7 

CHAPTER  III. 
THE  WORLD  PRICE  LEVEL  AND  THE  TARIFF  PRICE  LEVEL 

In  the  illustration  on  the  opposite  page,  our  artist  has  given 
us  a  symbol  of  the  machinery  which  Congress  has  put  into  the 
hands  of  the  Producer  to  enable  him  to  get  from  the  Consumer 
higher  prices  than  the  Consumer  would  have  to  pay  in  the  open 
market.  It  shows  how  a  Tariff  Wall  raises  the  PRICE  LEVEL 
of  the  goods  and  products  it  "Protects."  The  illustration  tells 
the  whole  story.     Look  it  over  and  think  it  out  for  yourself. 

These  billions  of  dollars'  worth  of  Foreign  Goods  which 
every  year  we  ourselves  demand,  need  and  consume,  flow 
directly  across  the  ocean  to  our  shores  down  at  the  WORLD 
Price  Level.  There  they  are — down  there.  But  we  cannot 
get  them — down  there.  Before  we  can  reach  them,  or  they 
reach  us,  they  must  flow  up  over  the  towering  Tariff  Wall — to 
the  cost-plane  of  the  TARIFF  PRICE  LEVEL. 

All  goods  shipped  to  us  from  any  part  of  the  world— Europe, 
Asia,  Africa,  Canada,  South  America,  Mexico,  Australia — must 
pass  thru  one  of  the  scores  of  Custom  Houses  along  the  bound- 
ary separating  us  from  the  rest  of  the  world,  be  inspected  by 
custom  house  officials,  and  a  Tariff  Tax  levied  on  them— unless 
specifically  exempted  by  being  on  the  Free  List. 

Therefore,  in  each  Custom  House  this  Taxing  Machinery 
must  be  set  up  and  a  separate  Tariff  Wall  built  for  each  class 
of  articles,  in  order  to  compel  us  to  purchase  them — not  at 
their  normal  price  in  the  Open  Market — but  at  the  "Price  In- 
creased by  the  Tariff." 

In  order  to  thus  systematically  tax  everything  that  labor  has 
produced,  our  Tariff  Makers — beginning  as  far  back  as  1883 — 
have  divided  all  material  substances  and  products  which  satisfy 
the  desires  and  needs  of  human  life  into  Fourteen  Classes — 
called  Schedules. 

There  is  absolutely  no  form  of  wealth  which  the  genius  of 
man  has  created,  no  product  or  invention  which  his  skilled 
hands  have  fashioned,  that  does  not  fall  within  one  of  these 
Fourteen  Schedules.  A  mere  enumeration  of  their  titles,  to- 
gether with  a  few  items  under  each,  will  give  the  reader  some 
conception  of  the  vast  multitude  of  products  in  the  huge  stream 
of  life's  necessities,  which  it  is  now  proposed  shall  be  made  to 
pass  over  "the  highest  Tariff  Wall  in  our  history." 


8  TARIFF  PRIMER 

(1)  A— Chemicals,  Oils  and  Paints:    All  forms  of  medi- 

cines and  drugs,  perfumes,  floral  waters,  flavoring 
extracts,  porous  plaster,  etc. 

(2)  B— Earth,    Earthenware    and    Glassware:    All 

forms  of  bricks  and  clays,  crushed  limestone,  watch 
crystals,  tiles,  china  ware,  Portland  cement,  mir- 
rors, plate  glass,  marble,  spectacles,  tombstones,  etc. 

(3)  C— Metals  and  Manufactures  of  Metals:   Nuts, 

bolts  and  washers,  nails,  tacks  and  brads,  corset 
steels,  sewing  machines,  iron  and  aluminum  ware, 
harness,  saws,  automobiles  and  parts,  razors, 
watches,  clocks,  cutlery,  etc. 

(4)  D— Wood  and  Manufactures  of:    Furniture,  porch 

and  window  blinds,  picket  pailings,  toothpicks, 
butchers'  skewers,  casks,  coffins,  clothes  pins,  etc. 

(5)  E— Sugar  and  Molasses:    Cane  sugar,  beet  sugar, 

maple  sugar,  syrups,  candies  and  all  other  forms  of 
confectionery. 

(6)  F— Tobacco  and  Manufactures  of:    Wrapper  and 

filler  tobaccos,  smoking  tobacco,  cigars,  cigarettes, 
chewing  tobacco,  etc. 

(7)  G— Agricultural  Products  and  Provisions:  Live 

stock,  meat,  fish,  vegetables,  milk  and  cream,  but- 
ter, cereals,  fruits,  nuts,  flours,  bread,  preserves, 
seeds,  etc. 

(8)  H— Spirits,  Wines  and  Other  Beverages:    Brandy, 

cordials,  malt  extracts,  soda  water,  mineral  waters, 
cherry  and  fruit  juices,  etc. 

(9)  I— Cotton  and  Manufactures  of:    Cotton  staple, 

cotton  yarns,  sewing  thread,  tire  fabrics,  table 
covers,  cotton  gloves,  cotton  clothing,  bedspreads, 
sheets  and  pillow  cases,  collars  and  cuffs,  cotton 
cloth,  cotton  sheeting,  pile  fabrics,  shoe  strings, 
lace  curtains,  etc. 

(10) J— Jute,  Hemp  and  Flax:  Flax  straw,  fiber  towels, 
bags  and  bagging,  table  damask,  linoleum,  floor  oil- 
cloth, sheeting,  straw  mattings,  etc. 

( 11)  K— Wool  and  Manufactures  of:  Wool  and  hair  of 
sheep,  goats,  alpaca  and  like  animals,  wool  yarn, 
blankets,  robes,  webbing,  belts,  hose,  gloves,  knit 
fabrics,  underwear,  all  carpets  and  rugs,  all  clothing, 
wearing  apparel,  etc. 


The  World  Price  Level  and  the  Tariff  Price  Level  9 

(12)L— Silk  and  Silk  Goods:    Sewing  silk,  plushes,  velvets, 

ribbons,  gloves,  handkerchiefs,  hosiery,  underwear, 

all  wearing  apparel,  all  other  silk  manufactures. 

( 13 )M— Paper  and  Books:     Printing  paper,  letter  paper, 

carbon  paper,  wall  paper,  paper  board,  wrapping 

paper,   books   of  all   kinds,   leather-bound   books, 

photograph    albums,    all    other    manufactures    of 

paper, 

(14 )N— Sundries:    Straw  hats,  tooth  brushes,  combs,  all 

forms  of  buttons,  all  manufactures  of  leather,  all 

embroideries  and  everything  else  not  previously 

mentioned. 

Look  about  you  in  your  home.     There  is  scarcely  a  single 

article  on  which  the  eye  can  fall  that  does  not  bear  a  Tariff  Tax. 

Even  your  sewing  machine  has  been  taken  off  the  Free  List 

and  given  a  Tariff  Tax.     There  is  a  Tariff  Tax  on  practically 

every  article  of  food  on  your  table.     This  is  true  also  of  your 

dishes,  silverware,  cutlery,  napkins  and  tablecloth ;  as  well  as  the 

table  itself,  the  lighting  fixtures  above  it,  and  the  chairs  upon 

which  you  sit.     There  is  no  article  of  clothing  on  your  person 

down  to  the  minutest  detail  which  does  not  bear  a  Tariff  Tax. 

The  same  is  true  of  the  house  itself  and  of  all  the  furnishings, 

ornaments,  and  kitchen  utensils  which  it  contains — from  the 

cement  in  the  foundation,  the  carpets  on  the  floor,  the  paper 

and  pictures  on  the  wall,  the  glass  in  the  windows,  the  curtains 

and  shades,  the  tile  in  the  fire-place,  on  up  to  the  nails  in  the 

shingles  on  the  roof — all  bear  a  Tariff  Tax. 

Some  rhymester,  with  a  keen  sense  of  the  humor  and  ab- 
surdity of  the  whole  situation,  has  stated  the  case  quite  fully 
in  poetic  form: 

"We  are  taxed  on  our  clothing,  our  meat  and  our  bread, 
On  our  carpets  and  cupboard,  our  table  and  bed ; 
On  our  knives  and  our  spoons,  on  our  fuel  and  lights — 
We  are  taxed  so  severely  we  can't  sleep  o'nights. 

We  are  taxed  on  our  hats,  our  shoes,  and  our  shops. 
On  our  blankets  and  stoves,  our  brooms  and  our  mops; 
On  our  rice  and  our  sugar,  and  when  we  must  die. 
We'll  be  taxed  on  the  coffin  in  which  we  shall  lie. 

We  are  taxed  on  all  wants  by  Providence  given. 
We  are  taxed  on  the  Bible  which  points  us  to  Heaven; 
And  when  we  ascend  to  that  heavenly  goal, 
They  will  if  they  can,  put  a  tax  on  our  Soul." 


Putting  Foreign  Goods  Over  the  Tariff  Wall  11 


CHAPTER  IV. 
Putting  Foreign  Goods  Over  the  Tariff  Wall 

The  picture  on  the  opposite  page  gives  us  a  "snap  shot"  of 
the  importer  of  Foreign  Goods  in  the  act  of  shifting  the  Tariff 
Tax  over  on  the  American  Consumer. 

The  Tariff  Tax  of  100%,  which  we  have  assumed  our  Govern- 
ment had  levied  on  his  goods,  has  already  been  paid  by  the  im- 
porter. He  had  to  pay  that  before  he  could  land  his  goods. 
The  foreign  cost  of  his  goods,  by  the  time  he  gets  them  to  our 
shores,  is  assumed  to  be  $400  per  package.  Our  importer  now 
has  $800  capital  invested  in  each  package — $400  in  the  goods 
and  $400  more  in  the  tariff  on  the  goods. 

Now  what  will  he  do?  We  know  exactly  what  he  will  do. 
He  will  add  the  cost  of  the  Tariff  to  the  cost  of  the  goods — 
making  the  price  to  us  $800  instead  of  $400 — and  shove  the 
goods  over  the  wall.  He  will  also  add  tivo  profits — one  on  the 
goods,  and  the  other  on  the  tariff. 

This  process  of  shifting  the  cost  of  the  tariff  over  on  the  Con- 
sumer holds  to  the  last  detail  of  the  billions  of  dollars'  worth  of 
commodities  which  we  annually  import.  In  reference  to  each 
bill  of  goods,  and  each  separate  item  imported,  THE  TARIFF 
Tax  Levied  by  the  Government  Is  Paid  by  the  Mer- 
chant Who  Brings  the  Goods  Over— and  by  Him  Is 
Added  to  the  Cost  of  the  Goods — and  so  is  Paid  by 
THE  Consumer  of  the  Goods. 

Thus  do  we  see  that  it  is  not  the  importer,  but  the  Consumer, 
who  pays  the  Tariff.  And  on  scores  of  articles,  under  the  new 
Profiteers'  Tariff,  the  cost  of  the  tariff  will  be  higher  than  the 
cost  of  the  goods.  But  it  will  not  be  listed  on  our  bill  as  a 
separate  item — so  much  for  the  goods,  so  much  for  the  tariff. 
If  this  were  done,  the  inordinate  rates  in  the  Fordney-McCum- 
ber  Tariff  would  not  last  a  month  without  producing  a  revolu- 
tion. It  is  a  secret,  hidden  mode  of  taxation.  The  people 
pay  it  without  knowing  that  it  is  being  paid.  Fordney  goes 
on  Shakespeare's  theory: 

"He  who's  robbed,  but  knows  not  of  it, 
IS  NOT  ROBBED  AT  ALL." 


Price-Fixing  Inside  the  Tariff  Wall  13 


CHAPTER  V. 
Price-Fixing  Inside  the  Tariff  Wall 

Having  shown  that  on  the  outside  of  our  Tariff  Wall  the  first 
act  of  those  who  bring  over  Foreign  Goods  is  to  add  the  cost  of 
the  tariff  to  the  cost  of  the  goods,  our  artist  here  shows  us  what 
is  also  taking  place  on  the  inside  of  the  Tariff  Wall.  There- 
fore, no  matter  on  which  side  of  this  towering  structure  you  cast 
your  gaze  you  behold  the  same  little  game — Adding  THE 
Cost  of  the  Tariff  to  the  Cost  of  the  Goods. 

The  Only  Object  in  Building  a  PROTECTIVE  Tariff 
Wall  Around  This  Country  is  to  Increase  the  Price 
OF  Foreign  Goods  to  American  Consumers,  so  that 
the  American  Producer  Can  Also  Increase  the 
Price  of  His  Goods  to  these  Same  American  Con- 
sumers. 

If  it  were  not  for  the  fact  that  High  Tariffs,  by  increasing  the 
price  of  Foreign  Goods  to  American  people,  also  make  possible 
a  parallel  increase  of  price  in  the  competing  Home  Goods, 
There  Would  Be  No  Protective  Tariff  Wall  Around 
This  Country,  or  Any  Other  Country. 

Now  let  us  get  an  exact,  scientific  statement  of  the  effects  of 
High  Tariffs  on  these  two  classes  of  goods.  It  is  this:  First, 
High  Tariffs  necessitate  an  increase  in  price  of  the  Foreign 
Goods  on  which  they  are  levied.  Second,  they  make  possible 
an  increase  of  price  on  similar  Home  Goods  which  compete 
with  them.  They  necessitate  the  one — they  make  possible  the 
other.  And  it  is  for  the  sole  purpose  of  making  possible  an 
increase  in  the  selling  price  of  Home  Goods  that  all  Protective 
Tariff  Laws  are  passed. 

What  other  purpose  could  they  have  in  levying  such  extor- 
tionate rates?  They  are  not  for  the  purpose  of  raising  money 
for  the  Government.  Low-rate  Revenue  Tariffs  do  that. 
Therefore,  High  Tariffs  are  levied  solely  for  the  purpose  of 
raising  revenue  for  private  pockets.  And  to  do  this  they  must 
increase  the  price  of  Foreign  Goods,  thus  making  possible  a 
parallel  increase  of  price  of  the  competing  Home  Goods. 

During  the  framing  of  a  Tariff  Bill,  Washington  is  over-run 
with  the  lobbyists  and  representatives  of  the  different  "inter- 


14  TARIFF  PRIMER 

ests."  They  present  to  those  in  charge  of  the  bill  a  statement 
showing  the  percentage  rate  of  increase  which  they  desire  to 
make  in  the  selling  price  of  their  products  to  their  American 
Consumers — and  which  increase  they  insist  they  must  have  in 
order  to  continue  to  do  business.  And  this  BECOMES  THE 
Tariff  Rate  on  their  Foreign  Competitor's  Goods. 

This  gives  us  a  broader  and  truer  vision  of  the  full  signifi- 
cance of  Protective  Tariffs.  We  have  already  seen  that  the 
whole  stream  of  Foreign  Goods,  amounting  to  some  five  billions 
annually,  must  go  up  over  this  towering  Tariff  Wall,  with  prices 
increased  anywhere  from  25%  to  150%.  Now  we  are  called 
upon  to  form  a  still  larger  vision  of  that  huge  stream  of  Home 
Goods — more  than  ten  times  greater — which  it  is  the  purpose 
of  the  Fordney-McCumber  Tariff  to  increase  in  cost  to  us 
Just  the  Same  as  if  they  also  Flowed  Over  the 
Tariff  Wall,  Side  by  Side  With  Foreign  Goods. 

The  illustration  at  the  head  of  the  chapter  might  be  thought 
to  imply  that  all  commodities  can  be  produced  in  this  country 
as  cheaply  as  they  can  be  produced  abroad.  Hence  the  reason 
for  marking  the  whole  of  the  increased  price  of  Foreign  Goods, 
necessitated  by  our  High  Tariff  Wall,  as  simply  so  much  addi- 
tional "profit"  given  to  the  Producers  of  similar  Home  Goods. 

On  the  other  hand,  our  Tariff  Makers  have  assumed  just  the 
reverse.  They  have  assumed  that  we  can  produce  absolutely 
nothing  in  this  country  as  cheaply  as  it  can  be  produced  in 
foreign  lands.  The  proof  that  this  is  their  supposition  is  found 
in  the  fact  that  they  have  put  tariff  rates — and  on  thousands  of 
articles  high  tariff  rates — on  practically  everything  that  is  pro- 
duced in  this  country — everything.  Had  you  never  thought 
of  that? 

Thus  would  Mr.  Fordney  and  his  followers  have  us  believe 
that  with  all  our  supposed  skill,  knowledge,  education,  machin- 
ery and  inventive  genius;  that  with  all  our  schools,  colleges  and 
universities;  even  the  most  ignorant,  degraded,  illiterate  and 
unskilled  laborers  on  earth  can  produce  anything  cheaper — and 
therefore  more  efficiently — than  our  own  laborers  can  produce 
it.  And  for  that  reason,  undersell  us  in  our  own  markets. 
Some  tribute  to  American  Labor! 

My  answer  is  this:  WHILE  THERE  ARE  MANY  COMMODI- 
TIES Which  We  Cannot  Produce  as  Cheaply  in  This 
Country  as  They  Can  Be  Produced  Abroad,  There 
Are  Vastly  More  Commodities  Which  We  Can  Pro- 
duce, AND  Do  Produce,  More  Cheaply  Than  Any 


Price-Fixing  Inside  the  Tariff  Wall  15 

Other  Country  in  the  World.  Therefore,  our  artist's 
illustration  is  true  as  to  principle,  and  holds  as  to  detail  in  refer- 
ence to  the  big  majority  of  all  our  productions. 

The  proof  of  the  above  statement  is  found  in  the  fact  that  we 
exported  over  $8,000,000,000  worth  of  goods  during  1920.  If 
we  could  not  produce  and  undersell  foreign  competitors  in  their 
own  market,  they  would  not  have  bought  these  goods.  But  if 
we  could  undersell  them  in  their  own  market — after  paying  the 
cost  of  transportation  and  the  tariff  in  their  country — surely 
we  can  undersell  them  here.     No  sane  man  will  deny  that. 

A  profound  analysis  thus  enables  us  to  divide  all  our  produc- 
tions into  two  distinct  classes:  (1)  Those  which  we  can  pro- 
duce more  cheaply  than  we  can  buy  from  abroad.  (2)  Those 
which  we  cannot  produce  as  cheaply  as  we  can  buy  them;  and, 
therefore,  which  we  cannot  produce  at  all  without  the  aid  of  a 
Protective  Tariff. 

The  question  in  reference  to  the  first  class  of  productions  can 
have  but  one  answer:  THE  ADDED  PRICE  WHICH  THE 
Tariff  Makes  it  Possible  for  Their  Producers  to 
Get  from  Us  Is  Simply  a  Bounty,  a  Bonus.  It  is  tribute, 
graft,  plunder — extortion.  No  man  or  woman  with  any  intel- 
lectual pride  will  deny  that  proposition. 

But  what  shall  we  say  of  that  second  class  of  goods  and  pro- 
ducts which  I  myself  claim,  or  admit,  can  jiot  be  produced  in 
this  country  without  the  aid  of  a  Protective  Tariff?  To  this 
also  there  can  be  but  one  answer:  ANY  LINE  OF  GOODS  OR 
Products  Which  Cannot  Be  Produced  in  This  Coun- 
try Without  the  Aid  of  a  Protective  Tariff — Ought 
Not  to  Be  Produced  At  All.  And  that  for  the  reason 
that  all  such  goods  and  products  are  produced  at  an  absolute 
economic  and  financial  loss  to  the  country. 

To  illustrate,  the  same  amount  of  labor  expended  in  Louis- 
iana in  producing  corn,  cotton  or  any  other  "native"  product, 
and  traded  for  sugar,  would  give  far  more  sugar  than  it  now 
gives  by  producing  sugar  direct.  Thus  by  means  of  Protect- 
ive Tariffs  we  are  diverting  labor  to  the  least  productive  sources, 
instead  of  employing  it  in  the  most  productive  sources.  This 
unfortunate  experiment  of  trying  to  produce  a  Tropical  plant 
in  the  Temperate  Zone  has  been  an  economic  loss  of  billions  of 
dollars  to  the  American  people.  And  in  the  new  Tariff  the 
stage  is  again  set  for  the  Sugar  Trust  to  collect  hundreds  of 
millions  more. 


Monopolizing  the  Home  Market  17 


CHAPTER  VI. 
Monopolizing  the  Home  Market 

In  the  picture  on  the  opposite  page  our  artist  has  given  us  a 
new  situation,  one  in  which  the  American  Producer  does  not 
increase  the  cost  of  his  goods  to  the  full  extent  that  the  Tariff 
has  increased  the  cost  of  his  foreign  competitor's  goods. 

In  doing  this  he  shows  us  how  the  American  Producer,  by 
getting  a  Tariff  Wall  high  enough,  can  make  huge  profits  and 
still  undersell  his  foreign  competitor — and  thus  establish  a 
monopoly  of  the  Home  Market  for  his  own  products. 

In  the  last  picture  we  saw  the  American  Producer  marking 
up  the  price  of  his  goods  to  Consumers  to  an  equality  in  price 
with  his  foreign  competitor's  goods,  thus  placing  Home  Goods 
up  on  the  Tariff  Price  Level  side  by  side  with  Foreign  Goods. 
In  the  present  illustration  he  takes  just  the  opposite  course. 

These  two  drawings  graphically  picture  to  us  the  two  possible 
alternatives,  which  a  Tariff  Wall  presents  to  favored  Producers 
in  every  country.  In  the  first  alternative,  prices  of  Home 
Goods  are  boosted  clear  to  the  top  of  the  wall.  While  by  this 
course  they  will  supply  only  a  part  of  the  local  demand — the 
rest  being  supplied  v/ith  Foreign  Goods — THEY  WILL  GET 
More  for  What  They  Do  Sell. 

The  second  alternative  is  that  of  taking  advantage  of  only 
a  part  of  the  increase  of  price  which  a  High  Tariff  makes  pos- 
sible. In  the  illustration,  the  Tariff  Wall  raised  the  price  of  a 
given  foreign  product  from  $400  to  $800.  The  American  Pro- 
ducer, by  raising  his  price  to  only  $700,  keeps  the  Foreign  Goods 
out,  and  establishes  a  monopoly  of  the  Home  Market.  WHILE 
Making  a  Less  Profit  on  Each  Individual  sale,  yet  he 
has  the  supplying  of  the  entire  home  demand  for  himself. 

Even  for  the  lower  prices  at  which  manufacturers  must  sell 
their  products  in  the  Home  Market,  in  order  to  "corner"  this 
market,  THEY  HAVE  A  REMEDY,  and  a  good  one.  This  ex- 
plains the  terrific  and  disgraceful  scramble  at  Washington  dur- 
ing the  pending  of  a  Tariff  Bill  to  secure  high  rates. 

The  instructions  of  the  Big  Interests  to  the  representatives 
they  are  sending  to  Washington  during  the  framing  of  a  Tariff 
Bill  is  to  this  effect:     "Get  the  tariff  high  enough  on  our  for- 


18  TARIFF  PRIMER 

eign  competitor's  goods.  Make  sure  of  that.  Then  we  can 
raise  prices  as  high  as  the  people  can  possibly  pay,  and  still  hold 
a  monopoly  of  the  Home  Market."  Therefore,  even  tho  selling 
under  the  foreign  price  increased  by  the  Tariff,  they  can  still 
get  from  the  people  "All  THAT  the  Traffic  Will  Bear." 

It  makes  no  difference  to  us,  the  Consumers,  which  course  is 
taken.  Either  one  permits  the  forming  of  Trusts  and  Com- 
bines. In  order  to  raise  the  price  of  Home  Goods  up  to  the 
cost  of  Foreign  Goods  on  the  Tariff  Price  Level,  combinations 
and  "gentlemen's  agi'eements"  must  be  made  to  prevent  com- 
petition among  themselves — and  thus  keep  prices  up.  NO 
Tariff  Wall  Can  Long  Benefit  Any  Industry  With- 
out THE  Aid  of  Trusts  and  Monopolies. 

Therefore,  if  the  Producers  of  any  "protected"  product  are 
unable  to  "get-together"  and  form  Trusts  and  Combines — as  is 
particularly  true  of  the  millions  engaged  in  agriculture— then 
local  competition  among  themselves  will  hold  the  price  of  their 
product  down  to  the  same  general  level  that  would  exist  IF 
There  Were  No  Tariff  Wall.  Thus  are  Tariffs  and 
Trusts  inseparable.  The  Tariff  makes  the  Trust  possible — 
the  Trust  makes  the  Tariff  useful. 

Mr.  Fordney  has  asserted,  over  and  over  again,  that  he  is 
not  seeking  to  establish  a  Monopolistic  Tariff,  but  a  Competi- 
tive Tariff.  In  saying  this  Mr.  Fordney  shows  himself  to  be 
either  an  ignoramus  in  economics  or  a  demagog.  The  reader 
may  choose  whichever  term  seems  the  more  charitable. 

Why  do  I  say  this?  Because  to  make  a  Tariff  Bill  "competi- 
tive"— with  average  rates  of  between  60%  and  70% — depends 
not  on  Mr.  Fordney,  but  on  American  Producers  taking  full 
advantage  of  the  'price- fixing  opportunities  which  he  has  so 
liberally  given  them;  by  so  marking  up  the  price  of  their 
goods  as  to  place  them  on  an  equality  with  Foreign  Goods  at 
the  Tariff  Price  Level.  Then  the  cost  of  either  will  be  exactly 
the  same  to  us.  That  alone  would  make  a  "competitive" 
Tariff. 

However,  if  that  were  done,  two  very  surprising  things 
would  happen.  First,  not  only  will  FOREIGN  GOODS  be  in- 
creased to  us  the  full  extent  of  the  tariff  rates  on  them,  but  the 
volume  of  HOME  GOODS,  ten  times  greater,  will  also  be  in- 
creased in  cost  to  us  the  full  extent  that  the  Tariff  Wall  in- 
creased the  cost  of  Foreign  Goods.  And  the  higher  the  tariff 
rates,  the  higher  will  be  the  price  of  Home  Goods.  Some  con- 
tribution to  old  H.  C.  L. 


Monopolizing  the  Home  Market  19 

And  yet  Fordney,  McCumber  and  their  followers  have  re- 
peatedly claimed  that  their  tariff  WILL  NOT  INCREASE  THE 
Cost  of  Home  Goods.  Let  us  see  if  it  would  not.  To  make 
it  a  "competitive"  tariff  Foreign  Goods  must  come  in.  That 
much  is  certain.  But  they  cannot  come  in  unless  Home  Goods 
are  marked  up  to  an  equality  of  price  with  them;  so  that  whether 
we  buy  Foreign  Goods  or  Home  Goods,  we  must  get  both  up 
on  the  Tariff  Price  Level — at  the  same  cost  to  us.  Therefore, 
The  Only  Way  Normal  Competition  Can  be  Re- 
stored Between  Us  and  Foreign  Countries,  Under 
the  Monstrous  and  "Unconscionable"  Rates  in  the 
fordney-mccumber  tariff,  is  to  enormously  in- 
CREASE THE  Costs  of  All  Domestic  Products  to  the 
American  People. 

In  the  second  place,  if  Mr.  Fordney's  Tariff  is  what  he  claims 
it  is — a  Competitive  Tariff — Foreign  Goods  would  still  come  in. 
But  he  also  claims  that  foreign  importations  THROW  AMERI- 
CAN Labor  Out  of  Employment.  If  this  Tariff  allows 
Foreign  Goods  to  come  in,  which  it  must  do  in  order  to  be  a 
Competitive  Tariff,  instead  of  a  Prohibitive  Tariff,  then  it  will 
also  throw  labor  out  of  employment  just  the  same  as  he  claimed 
the  Underwood  Tariff  did.  The  only  difference  would  be  that 
under  his  Tariff  labor  will  have  to  pay  far  more  for  the  necessi- 
ties of  life  than  it  did  under  the  Underwood  Tariff.  So  labor 
will  gain  nothing  in  the  way  of  employment,  but  will  lose  tre- 
mendously by  having  to  pay  vastly  more  for  the  necessities 
of  life! 


20  TARIFF  PRIMER 


CHAPTER  VII. 
How  Much  is  the  Tariff  Tax? 

Your  state  and  county  tax  runs  only  so  many  mills  on  the 
dollar  for  each  different  item.  When  it  gets  as  high  as  three 
cents  on  the  dollar  you  begin  to  protest.  You  know  there  is 
extravagance  somewhere.  Three  cents  on  the  dollar  is  only 
3%.  The  Tariff  Tax  on  any  article  is  seldom  less  than  25%. 
That  is  eight  times  as  much.  In  many  cases  your  Tariff  Tax 
is  twenty-five  times  as  much  as  your  state  and  county  tax. 
Think  of  it.  And  yet  you  grumble  at  the  one,  but  are  in  favor 
of  the  other.  You  know  that  the  one  is  a  burden.  But  some- 
how you  have  the  idea  that  a  TAX  TWENTY-FIVE  TIMES 
Greater  Is  a  Blessing! 

While  the  tariff  rate  usually  begins  at  25%,  it  does  not  end 
there.  It  goes  to  35%,  50%,  60%,  80%,  100%.  It  goes  even 
beyond  this  to  125%,  and  on  up  to  200% — and  more.  The 
Payne-Aldrich  Tariff  of  1909  had  an  average  rate  on  all  articles 
of  about  60%.  Before  his  death,  Senator  Penrose,  then  Chair- 
man of  the  Senate  Finance  Committee,  is  reported  to  have  said 
that  some  of  the  rates  in  the  Fordney  Tariff  Bill,  which  had  just 
passed  the  House,  would  go  as  high  as  800%. 

There  are  two  classes  of  Tariff  duties:  Specific  and  Ad  Val- 
orum.  The  latter  means  "according  to  value."  For  instance, 
the  McKinley  Tariff  of  1890  levied  an  ad  valorum  duty  of  50% 
on  women's  and  children's  dress  goods,  60%  on  ready-made 
clothing  and  wearing  apparel,  60%  on  webbings,  beltings  and 
ribbons.  On  Ambussen,  Saxony  and  Brussels  carpets,  40%. 
On  woolen  cloths— worth  more  than  40c  per  pound — 50%. 
Nearly  all  of  these  rates  were  continued  by  the  Dingley  and  the 
Payne-Aldrich  Tariffs,  and  now  by  the  Fordney-McCumber 
Tariff. 

A  Specific  Duty  is  levied,  not  "according  to  value",  but  ac- 
cording to  quantify.  For  instance,  the  Tariff  of  1872  laid  a 
specific  duty  of  $28  per  ton  on  steel  rails!  On  the  articles 
above  mentioned,  the  McKinley  Tariff  laid  a  specific  duty  of 
12c  a  yard  on  women's  and  children's  dress  goods,  50c  a  pound 
on  ready-made  clothing,  60c  a  pound  on  webbings,  beltings 
and  ribbons,  60c  a  square  yard  on  Ambusson  and  Saxony  car- 


How  Much  Is  the  Tariff  Tax?  21 

pets,  44c  per  square  yard  on  Brussels  carpet  and  44c  a  square 
yard  on  all  woolen  cloths  worth  over  40c  a  pound. 

Both  duties  are  used  on  hundreds  of  articles.  When  so  used 
they  are  called  Compound  Duties.  In  the  McKinley  Tariff, 
the  Compound  Duties  on  women's  and  children's  dress  goods, 
gave  a  total  tariff  rate  of  104%;  on  ready-made  clothing  and 
wearing  apparel,  80%;  on  webbings,  beltings,  ribbons,  etc., 
94%;  on  Ambusson  and  Saxony  carpets,  69%;  on  Brussels  car- 
pets, 81% ;  and  on  woolen  cloth  mentioned  above,  143%.  These 
rates  were  largely  preserved  in  the  Dingley  Tariff  of  1897  and 
most  of  them  were  increased  in  the  Payne-Aldrich  Tariff  of  1909, 
while  the  rates  in  the  latter  tariff  have  been  perpetuated,  and 
many  of  them  increased,  by  the  Fordney-McCumber  Tariff. 

As  showing  still  further  the  effects  of  compound  duties,  the 
McKinley  Tariff  imposed  a  total  duty  of  112%  on  cheap  woolen 
yarns,  108%  on  cheap  woolen  blankets,  130%  on  worsted  goods, 
138%  on  cheap  knit  goods,  and  on  the  lowest  grade  of  pearl 
buttons,  280%. 

The  effect  of  compound  duties  is  to  put  the  highest  tariff 
rates  on  the  cheapest  goods,  thus  throwing  the  great  burden  of 
Tariff  Taxation  on  the  toiling  masses  of  any  country.  The  ex- 
planation is  clear.  For  instance,  if  the  ingrain  carpets,  with  a 
specific  duty  of  22c  per  square  yard,  have  a  foreign  value  of 
only  22c  per  square  yard,  then  the  poorer  classes  who  must  buy 
the  cheaper  grades  would  be  paying  a  hundred  per  cent,  on  the 
specific  duty  alone.  To  this  was  added  a  40%  ad  valorum  duty. 
It  is  estimated  that  the  specific  duty  of  31c  per  pound  in  the 
Fordney-McCumber  Tariff  on  scoured  wool,  will  make  a  tariff 
rate  of  137%  on  some  of  the  cheaper  grades  of  wool. 

Before  the  war  our  total  dye  bill  was  $15,000,000.  That  is, 
we  used  only  $15,000,000  worth  of  dye  each  year  in  this  country. 
When  the  importations  of  dye  from  Germany  were  stopped,  we 
started  to  manufacture  our  own  dyes,  and  the  Dye  Interests  in 
this  country  made  $150,000,000  profit  on  four  dyes  alone  in  six 
years.  In  other  words,  their  profit  on  four  dyes  in  six  years 
was  ten  times  our  yearly  dye  bill  before  the  war.  The  multi- 
millionaires back  of  the  Dye  Monopoly,  fought  for  two  years  to 
secure  an  absolute  embargo.  They  failed  in  this,  but  got  a 
Compound  Duty  of  7  cents  a  pound,  plus  60% — American 
Valuation — which  practically  amounts  to  an  embargo.  Noth- 
ing in  the  "Tariff'  of  Abomination"  of  1829  can  compare  to  that. 
There  is  but  little  hope  for  the  future  of  a  people  who  would 
tolerate  such  an  outrage  on  human  rights! 


22  TARIFF  PRIMER 

To  be  brief,  the  Fordney-McCumber  Tariff  has  perpetuated, 
and  increased,  the  extortionate  rates  of  the  McKinley  Tariff 
and  of  the  Payne-Aldrich,  both  of  which  were  overwhelmingly 
defeated  at  the  polls  in  the  first  elections  which  followed. 

It  is  estimated  that  the  Fordney  Tariff  will  enable  the  Big 
Interests  to  take  out  of  the  pockets  of  the  people  of  one  single 
state— New  York— a  tribute  amounting  to  $330,000,000! 

In  the  New  York  World  of  September  22,  the  day  following 
the  signing  by  President  Harding  of  the  Fordney-McCumber 
Tariff,  I  find  a  very  compact  summing  up  of  the  total  cost  to 
the  American  people  of  the  new  Tariff  Tax.  The  article  is  as 
follows: 

"WASHINGTON,  Sept.  21. — Every  American  family  will  pay  an  average 
of  $160  a  year  more  for  clothes,  food  and  other  necessities  because  of  the 
Fordney-McCumber  Tariff  bill.  Treasury  experts  said  today.  Although 
the  total  cost  of  living  will  be  increased  by  $4, 000,000, 000, the  bill  carries 
a  new  provision  authorizing  the  President  to  increase  the  rates  50%.  if 
he  desires. 

Of  the  total  protection  of  $6,500,000,000,  only  $230,000,000  will  be  paid 
into  the  Treasury  and  the  rest  will  go  to  the  favored  interests,  according  to 
the  experts. 

The  following  is  the  estimated  amount  of  protection  on  principal  products: 

Cement,  pottery,  chinaware,  $214,000,000;  steel  and  other  metals,  $1,- 
148,000,000;  wood,  furniture,  lumber,  $297,000,000;  sugar,  confectionery, 
$333,000,000;  tobacco,  $429,000,000;  food,  agricultural  products,  $1,233,- 
000,000;  cotton  goods,  $807,000,000;  wool  clothing,  $760,000,000;  silk  and 
silk  goods,  $326,000,000." 

The  consensus  of  opinion,  to  sum  it  all  up,  is  that  the  Ford- 
ney-McCumber Tariff  will  increase  the  cost  of  life's  necessities 
to  the  American  people  about  $4,000,000,000  annually. 

Thus  do  we  hope  to  enrich  ourselves  by  our  own  taxation — 
and  by  the  most  elaborate,  detailed  and  burdensome  system  of 
taxation  the  world  has  ever  known.  How  such  a  hope  should 
have  gotten  possession  of  the  brain  of  an  enlightened  people  is 
beyond  human  comprehension.  Other  people  have  fought  and 
died  to  prevent  taxation.  We  fight  to  obtain  it.  Other  people 
have  declared  it  life's  greatest  burden.  We  regard  it  as  the 
richest  of  blessings.  Other  people  have  risen  in  insurrection  to 
prevent  the  tax  rate  from  being  raised.  We  express  fear  and 
alarm  at  the  mere  prospect  of  the  Tariff  Tax  being  lowered. 


Where  the  Tariff  Costs  More  than  the  Goods  23 

CHAPTER  VIII. 
Where  the  Tariff  Costs  More  Than  the  Goods 

The  reader  is  probably  astounded  at  the  suggestion  repeat- 
edly made  that  on  scores  of  articles  the  tariff  costs  more  than 
the  goods;  hence  that  MORE  THAN  HALF  OF  THE  CON- 
SUMER'S Money  Goes,  Not  for  the  Goods,  But  for 
THE  Tariff  on  the  Goods. 

The  custom  house  records  of  the  past  fifty  years  are  strewn 
with  such  illustrations.  I  shall  select  only  a  few  from  a  volume 
issued  by  the  Government  entitled  "Imports  and  Duties,  1894- 
1907,"  page  889.  I  shall  give  the  number  of  the  table  in  which 
the  reader  will  find  the  facts  and  figures  as  here  set  down.  If 
facts  can  convince  you  then  you  are  going  to  be  convinced. 
YARNS,  MADE  WHOLLY  OR  IN  FART  OF  WOOL 
(Act  of  1897) 


Table  No.  3562.- 

-Value  not  more  than  30  cents  per  pound. 

Year 

Foreign  cost 

Cost  of  tariff 

Total  cost  to          Rate  of  tariff 

of  goods 

on  goods 

Consumer                   Tax 

1898 

$1,962.30 

$2,803.10 

$4,765.40                  142% 

1899 

997.30 

1,770.87 

2,768.17                  177% 

1900 

206.78 

352.07 

558.85                  170% 

Table  No.  3563, 

. — Value  more 

than  30  cents  per  pound. 

1898 

$  89,004.10 

$  93,040.84 

$182,044.94                  104% 

1899 

128,296.06 

131,292.96 

259,589.02                   102% 

CLOTHS,  WOOLEN 

OR  WORSTED 

Table  No.  3588. 

, — Value  more 

than  30  cents  per  pound 

1894 

$3,323.00 

$5,345.63 

$8,608.63                   161% 

1895 

3,870.00 

6,384.81 

10,254.81                   165% 

Table  No.  3589. — Value  more  than  30  cents  and  not  more  than 
40  cents  per  pound 

1894  $66,775.00  $97,312.01  $164,087.01  146% 

1895  23,530.00  35,794.51  59,324.51  152% 
DRESS  GOODS,  WOMEN'S  AND  CHILDREN'S  LININGS,  ETC. 

Table  No.  3612. — Value  not  more  than  40  cents  per  pound 

$2,268.59  $3,688.59  159% 

1,640.62  2,754.62  149% 

579.67        947.67        157% 

444.35        709.35        167% 


1898 

$1,420.00 

1902 

1,094.00 

1905 

368.00 

1906 

265.00 

24  TARIFF  PRIMER 

PLUSHES  AND  OTHER  PILE  FABRICS 

Table  No.  3641. — Value  not  more  than  40  cents  per  pound 

Year        Foreign  cost        Cost  of  tariff        Total  cost  to  Rate  of  tariff 

of  goods  on  goods  Consumer  Tax 

1898  $      89.00  $162.64  $251.64  183% 

BLANKETS 
Table  No.  3571. — Value  not  more  than  40  cents  per  pound 

1903  $    371.00  $    677.86  $1,048.86  183% 

1904  1,016.00  1,447.51  2,463.51  142% 

1905  507.00        807.74       1,314.74        159% 

1906  561.50  1,013.68  1,575.18  180% 
Enough  has  been  given  to  show  at  least  the  basis  of  the  con- 
clusion which  every  honest  and  enlightened  thinker  must  reach 
in  reference  to  "protection,"  and  that  conclusion  is  that  it  is 
THE  MOST  COLOSSAL  AND  OPPRESSIVE  SCHEME  OF  PLUNDER 
WHICH  THE  GREED,  CUPIDITY  AND  BRUTE  SELFISHNESS  OF 
MAN  EVER  CONCEIVED.  It  has  taken  its  millions  and  hundreds 
of  millions  out  of  the  pockets  of  those  whose  poverty  compels 
them  to  purchase  the  cheapest  quality  of  goods.  This  is  one  of 
the  mighty  reasons  why  the  millions  are  poor.  They  have  been 
plundered  into  poverty  by  a  long  line  of  thieving  Tariffs. 

You  will  observe,  for  example,  that  in  "ya-rns,  made  wholly 
or  in  part  of  wool,"  the  tariff  rates  on  those  having  a  value  of 
30  cents,  or  less,  go  as  high  as  177%;  while  those  having  a 
value  of  over  30  cents  a  pound,  have  tariff  rates  of  only  104%. 
The  104%  is  paid  by  those  in  comfortable  circumstances,  while 
the  177%  Tariff  Tax  is  paid  by  the  poorest  of  our  poor.  This 
scheme  of  putting  the  highest  Tariff  on  the  cheapest  goods  will 
apply  to  the  Fordney-McCumber  Bill  the  same  as  it  did  to  the 
McKinley,  the  Dingley  and  the  Payne- Aldrich. 

I  can  see  how  such  an  economic  policy  could,  and  does, 
plunder,  impoverish  and  despoil  the  multiplied  millions  of  our 
own  countrymen  who  must  consume  the  cheaper  grades  of 
goods.  But  I  cannot  see  how  it  can  enrich  them.  I  cannot 
see  how  it  can  lessen  their  burden  of  toil  by  increasing  the  cost 
of  their  necessities  of  life.     Can  you? 

Any  policy  which  makes  it  possible,  even  in  a  single  instance, 
to  take  from  the  toiling  m.asses  MORE  THAN  HALF  of  what 
they  expend  for  the  necessities  of  life  to  pay  the  Tariff  on  these 
necessities,  deserves  the  righteous  wrath  and  condemnation  of 
any  so-called  "free"  people.  If  it  really  be  true  that  people 
are  "prospered"  by  being  plundered,  then  great  should  be  the 
prosperity  of  the  toiling  multitudes  of  America! 


Does  the  ''Foreigner''  Pay  the  Tariff?  25 


CHAPTER  IX. 

Does  the  "Foreigner"  Pay  the  Tariff? 

For  generations  Protectionists  have  used  as  one  of  their  vital 
arguments  to  defend  their  acts  in  increasing  the  cost  of  the 
necessities  of  life  that  "THE  FOREIGNER  PAYS  THE  TARIFF". 
When  the  people  would  protest  against  exorbitant  tariff  rates, 
the  answer  was,  "What  does  it  matter  to  you?  The  foreigner 
pays  the  tax."  Nor  did  this  baseless  subterfuge  originate  in 
this  country.  It  was  used  in  England  long  before  the  "Repeal 
of  the  Corn  Laws"  in  1846,  and  is  still  employed  by  Protec- 
tionists in  Europe. 

The  suggestion  that  "The  foreigner  pays  the  tax"  has  a 
deeper  significance  even  than  appears  on  the  surface.  It  is  a 
vague  suggestion  that  the  people  of  one  country,  by  means  of 
the  Tariff,  can  tax  the  people  of  another  country;  and  thus 
compel  them  to  pay  the  expense  of  the  government  of  the 
people  levying  the  Tariff.  The  idea  dates  back  to  foreign 
wars  and  conquests.  It  is  the  old  thirst  to  tax  and  plunder 
"foreign"  nations. 

For  example.  Senator  McCumber  gave  this  as  his  excuse  for 
levying  a  preposterous  rate  on  some  product:  "We  have 
taxed  the  people  all  they  can  pay  with  our  income  tax,  corpora- 
tion tax,  etc.  We  still  need  more  revenue.  And  so  I  thought 
I  would  collect  the  extra  amount  needed  at  the  custom  house." 
The  implication  being  that  these  "extra  millions"  would  not 
come  out  of  our  pockets,  but  out  of  the  pockets  of  the  "for- 
eigners."    This  belief  is  universal. 

When  a  college  student  at  Al<Ton,  Ohio,  I  heard  William 
McKinley  give  expression  to  this  remarkable  proposition — and 
yet  one  that  has  been  repeated  in  various  forms  in  every  Tariff 
Debate  in  Congress,  and  in  every  political  campaign  in  which 
the  Tariff  was  an  issue.  In  an  impassioned  climax  he  said: 
"I  Am  Opposed  to  Taxing  Our  Own  People  to  Meet 
THE  Expense  of  Our  Govep.nment  So  Long  As  There 
Are  Foreign  People  to  Be  Taxed."  The  suggestion  was 
gi'eeted  with  tremendous  applause!  It  was  evidently  regarded 
as  a  noble  sentiment  and  the  expression  of  real  statesmanship. 
And  yet,  just  as  a  matter  of  fact,  he  would  not  have  done  this 


26  TARIFF  PRIMER 

if  he  could,  because  of  the  low  morals  involved;  and  could 
not  if  he  would. 

However,  Mr.  Fordney — of  whom  we  can  say  what  Macau- 
lay  said  of  George,  the  Third:  "He  never  learned  anything  nor 
forgot  anything" — made  this  ignorant  statement:  My  CON- 
TENTION Is— AND  I  Believe  Time  Has  Proven  It— That 
A  Protective  Tariff  on  the  Imported  Article  Is 
NOT  A  Tax  Imposed  on  the  Consumer.  Nine-tenths 
of  the  Duty  Is  Paid  By  the  Foreigner." 

In  the  illustration  used  by  our  artist  it  was  assumed  that  the 
cost  of  the  goods  to  the  merchant  who  brought  them  over — 
whether  he  was  an  American  or  a  foreigner  matters  not  in  the 
least — was  $400.  Upon  this  we  assumed  a  tariff  tax  of  $400. 
That  made  the  total  cost  to  him  of  the  goods  up  to  that  point, 
$800.  Now  the  question  is:  did  he  sell  those  goods  in  this 
country  on  the  basis  of  $400  only?  If  so,  then  he  himself  paid 
the  Tariff  Tax  and  did  7iot  pass  it  on  to  us.  But  if  he  added  the 
cost  of  the  Tariff  to  the  cost  of  the  goods — and  we  know  as  a  matter 
of  every-day  experience  that  he  did— then  we  paid  it. 

Let  us  get  a  clear  understanding  of  just  what  the  issue  is.  I 
gave  one  item  in  the  last  chapter  from  the  records  of  the  U.  S. 
Custom  House,  in  1898,  in  which  the  original  cost  of  the  goods 
was  $89.  Upon  this  our  government  levied  a  Tariff  Tax  of 
$162.64.  Now  suppose  that  this  goods  was  imported  by 
our  distinguished  "Merchant  Prince",  Mr.  John  Wanamaker, 
of  Philadelphia.  The  question  is  this:  At  what  price,  plus  his 
profit,  did  Mr.  Wanamaker  sell  these  goods  to  his  patrons? 
Did  he  sell  them  for  $89.  Or  did  he  sell  them  for  $251.64? 
Which  price  do  you  think  he  charged?  If  the  first,  then  it 
evidently  would  have  been  more  profitable  for  him  to  have 
made  us  a  present  of  the  goods,  but  charged  us  for  the  Tariff! 

In  addition,  we  know  that  he  added  his  profit  not  on  the  $89, 
but  on  the  $251.64.  That  is,  we  pay  two  profits — one  on  the 
Goods  and  the  other  on  the  Tariff.  And  each  succeeding  pair 
of  hands  thru  which  they  pass  will  keep  on  "pyramiding"  the 
profit  on  the  Tariff  as  well  as  on  the  goods. 

Or  if  John  Wanamaker  did  not  bring  them  over,  but  bought 
them  direct  from  the  importer,  how  could  the  importer  sell 
them  to  John  Wanamaker  for  $89?  Aside  from  what  he  paid 
for  these  goods,  he  paid  $162.64  tariff  on  them.  But  if  Mr. 
Wanamaker  paid  the  importer  $251.64  for  the  goods,  we  know 
that  he  did  not  sell  them  to  the  public  for  $89.  Nothing  more 
ignorant  or  absurd  was  ever  attempted  to  be  palmed  off  on  the 


Does  the  "Foreigner"  Pay  the  Tariff?  27 

credulity  of  mankind.  The  proposition  that  "the  foreigner 
pays  the  tariff"  stultifies  the  intelligence  of  any  man  or  woman 
who  makes  it. 

Furthermore,  in  saying  that  "nine-tenths  of  the  duty  is  paid  by 
the  foreigners,"  Mr.  Fordney  did  not  realize  that  if  what  he  said 
were  really  true,  IT  WOULD  DESTROY  His  WHOLE  SYSTEM 
OF  Protection.  It  would  make  all  his  work  in  building  a  High 
Tariff  Wall  useless,  and  his  promise  of  benefiting  the  farmers 
and  laborers  of  this  country  nothing  more  than  empty  air. 

Now  let  me  prove  this  proposition  to  you. 

Referring  to  the  illustration  on  page  .  If  the  importer 
did  not  add  the  cost  of  the  tariff  to  the  cost  of  the  goods,then 
they  would  sell  right  here  in  our  markets,  not  at  $800,  as  the 
artist  has  indicated,  but  at  only  $400 — their  foreign  cost.  In 
other  words,  they  would  be  sold  just  as  "cheap"  to  us  as  they 
would  if  Mr.  Fordney  and  his  associates  had  not  spent  nearly 
two  years  in  building  their  Tariff  Wall. 

Therefore,  the  only  way  his  High  Tariff,  "the  highest  in  our 
history,"  will  benefit  American  Producers  is  by  the  "foreigner" 
not  paying  the  Tariff  Tax.  Or,  rather — to  be  more  exact — by 
his  paying  it  first,  and  then  ADDING  THE  COST  OF  THE  TARIFF 
TO  THE  Cost  of  the  Goods. 

Here,  then,  is  a  gigantic  contradiction.  Either  the  importer 
does  add  the  cost  of  the  tariff  to  the  cost  of  the  goods — or  he 
does  not.  If  he  does  not,^  then  it  will  yield  no  "protection."  In 
other  words,  it  would  yield  revenue  for  the  Government,  but 
none  for  Private  Pockets.  That  would  m.ake  it  purely  a  Reve- 
nue Tariff.  But  Mr.  Fordney  has  been  trying  to  build  a  Pro- 
tective Tariff.  Heaven  knows  he  has  built  it  high  enough  to 
make  it  "protect."  Now  is  he  about  to  be  foiled  in  his  purpose 
by  having  the  "foreigner"  do  the  very  thing  which  Fordney 
says  he  does  do?  And  yet  his  work  is  useless  unless  the  high  rates 
he  has  levied  on  Foreign  Goods  are  actually  ADDED  TO  THEIR 
Cost  when  sold  to  American  Consumers — thus  making  pos- 
sible a  parallel  increase  of  price  in  the  competing  Home  Goods, 

On  the  other  hand,  if  the  cost  of  the  tariff  is  added  to  the  Cost 
of  the  Foreign  Goods — and  we  know  that  it  is  even  if  Mr.  Ford- 
ney does  not — in  order  to  make  possible  a  parallel  increase  of 
price  in  the  competing  Home  Goods— THEN  THE  WHOLE  CON- 
SUMING Public  Must  Pay  the  Tariff  on  Foreign  Goods 
— the  higher  the  tariff  rates  the  more  they  will  have  to  pay.  And 
this  same  consuming  public  will  have  to  pay  the  "Price  increased 
by  the  Tariff"  on  the  ten-fold  greater  volume  of  Home  Goods. 


OJ  9 

L 

^ 


y^^. 


^'^i 


Two  Streams  of  Revenue  29 


CHAPTER  X. 
Two  Streams  of  Revenue 

Who  Gets  the  Increased  Price  of  the  Necessities 
OF  Life  Which  the  Tariff  Produces?  Our  artist  has 
clearly  answered  the  question  on  the  opposite  page.  You  can 
see  the  answer  with  your  own  eyes.  No  man  on  earth  can  deny 
the  facts  there  pictured. 

As  he  has  shown  us,  the  answer  is  this:  THE  INCREASED 
Price  of  Foreign  Goods,  Due  to  the  Tariff,  Goes 
Directly  into  the  Public  Treasury.  The  Increased 
Price  OF  Home  Goods,  Due  to  the  Tariff  on  Foreign 
Goods,  Goes  into  Private  Pockets. 

Thus  while  a  Revenue  Tariff  raises  revenue  for  the  Govern- 
ment, a  Protective  Tariff  raises  revenue  for  Private  Pockets — 
and  for  these  only.  In  other  words,  the  Revenue  Branch  of 
the  Tariff  goes  to  the  Government.  The  Protective  Branch 
of  the  Tariff  goes  into  Private  Pockets.  Not  some  of  it,  but 
all  of  it,  goes  into  Private  Pockets.  Your  miind  m.ust  be  abso- 
lutely satisfied  on  that  point. 

Therefore,  when  we  are  considering  the  matter  of  raising 
revenue  for  the  support  of  the  Government,  we  are  dealing 
wholly  with  a  Revenue  Tariff.  It  is  only  when  we  are  planning 
and  scheming  to  raise  revenue  for  the  support  and  enrichment 
of  Private  Individuals  that  we  give  our  thought  to  a  Protective 

Tariff.  Get  this:  THE  One  and  Only  Purpose  of  a 
Protective  Tariff  Is  To  Raise  Revenue  for  Private 
Pockets. 

Now  that  part  of  the  increased  cost  of  life's  necessities,  due 
to  the  Tariff,  which  goes  to  the  Government,  is  justified.  But 
what  is  the  justification  of  the  part  which  flows  directly  into 
private  pockets?  By  what  right  are  we  taxed  for  the  support 
and  enrichment  of  private  individuals?  Unless  you  can  justify 
that,  you  cannot  justify  a  Protective  Tariff.  That  is  what  it 
is  for — and  all  that  it  is  for. 

It  is  safe  to  say  that  the  most  bigoted,  partisan  and  hide- 
bound Protectionist  is  such  only  because  he  does  not  know  that 
the  thing  for  which  all  his  life  he  has  been  voting,  is  simply  A 
System  of  Private  Taxation  Publicly  Enforced. 


30  TARIFF  PRIMER 

To  consider  the  merits  of  Protection  we  must  consider  it 
wholly  independent  of  the  Government's  need  for  revenue. 
Aye,  more  than  that.  If  there  were  no  need  for  public  revenue, 
if  governments  had  no  expenses  whatever  to  be  met;  still  if 
Protection  be  right— if  certain  Producers  are  "entitled"  to  get 
higher  prices  for  their  products  than  they  can  get  in  the  Open 
Market — then  it  would  justify  levying  a  tax  for  the  support  of 
these  private  individuals.     But  would  you  favor  it? 

You  would  not  only  rote  against  it,  but  you  would  fight 
against  it.  You  would  shoulder  a  musket  and  swear  that  you 
would  shed  your  last  drop  of  blood  before  such  a  law  should  be 
fastened  on  you  and  your  children.  If  you  did  not,  you  would 
be  unworthy  to  be  called  an  American.  And  yet  that  is  ex- 
actly what  the  Protective  Branch  of  the  Tariff  is  for,  and  all 
that  it  is  for— To  TAX  ALL  THE  PEOPLE  ON  THE  Necessi- 
ties OF  Life  in  Order  to  Benefit  and  Enrich  the 
Privileged  Few. 

Public  taxation  of  all  the  people  for  the  support  and  enrich- 
ment of  some  of  the  people  belongs  to  a  Despotism.  But  we 
have  perpetuated  it  in  a  Republic,  and  at  a  rate  of  taxation 
never  dreamed  of  in  an  Absolute  Monarchy — because  of  the 
fear  of  a  revolution.  There  is  nothing  new  about  taxing  the 
Masses  for  the  enrichment  of  the  Classes.  It  is  as  ancient  as 
Theft. 

It  is  simply  the  old  system  of  taxing  and  plundering  the  peo- 
ple for  the  support  of  the  nobility,  royal  families  and  Privileged 
Orders,  carried  into  our  modern  Twentieth  Century  Civiliza- 
tion. The  man  leaning  on  the  vault  in  which  Labor  is  shovel- 
ing his  income  from  the  Tariff  represents  the  Privileged  Classes 
of  today.  For  him  and  his  class  the  whole  consuming  public 
is  again  to  be  taxed,  plundered  and  impoverished  by  this  new 
monstrosity  of  greed  and  oppression,  known  as  the  Fordney- 
McCumber  Tariff. 

Since  October  3,  1913,  we  have  had  the  Underwood  Revenue 
Tariff.  It  yields  but  little  revenue  for  private  pockets — some 
but  not  much.  Practically  all  that  it  takes  out  of  the  pockets 
of  the  people,  by  taxing  them  on  the  necessities  of  life,  goes 
into  the  public  treasury.  In  1920,  about  61%  of  all  our  im- 
ports came  in  on  the  Free  List.  The  average  rates  at  the  cus- 
tom house  on  the  39%  which  was  taxable  was  only  16%.  Even 
with  these  low  rates  it  yielded  some  "protection,"  a1  least  to 
cotton  and  woolen  goods.  Furthermore,  it  raised  $325,000,000 
for  the  Government — more  than  the  new  Tariff  will  yield,  un- 


Tiro  Strea7ns  of  Revenue  31 

less  Trusts  and  Combines  jack  up  the  prices  of  Home  Goods  to 
the  Tariff  Price  Level  of  Foreign  Goods.  But  it  poured  but 
little  revenue  into  the  vaults  of  the  Privileged  Classes,  for 
whom  Protective  Tariffs  have  taxed  billions  of  dollars  out  of 
our  pockets  in  the  past. 

Such  a  state  of  things  their  greed  and  cupidity  could  tolerate 
no  longer.  And  now  comes  along  Fordney,  McCumber  and 
their  followers — the  agents  of  that  "Invisible  Government" 
maintained  by  our  mighty  rich — who  declare  that  this  must 
be  changed,  that  in  order  for  our  country  to  "prosper",  a 
Tariff  Wall  must  be  built  so  high  that  it  will  yield  some  revenue 
for  the  government,  but  vastly  more  revenue  for  our  Privileged 
Classes  who  are  always  the  big  contributors  to  campaign  funds. 
The  Fordney-McCumber  Tariff  stands  wholly  for  the  second 
stream  of  wealth  which  flows  into  private  pockets.  It  is  built 
to  multiply  a  hundred  fold  the  revenue  which  the  Underwood 
Tariff  has  been  yielding  for  private  pockets.  It  was  built 
wholly  for  that  increased  price  of  Home  Goods,  all  of  which — 
not  some  but  all— Goes  INTO  PRIVATE  POCKETS. 

No  issue  could  be  clearer  than  this.  No  fact  could  be  better 
established  in  any  branch  of  Science  than  the  fact  here  estab- 
lished— namely,  that  while  the  increased  price  of  Foreign  Goods, 
due  to  the  Tariff,  goes  into  the  Public  Treasury,  the  increased 
price  of  Home  Goods,  due  to  this  same  Tariff  on  Foreign  Goods, 
Goes  into  Private  Pockets.  It  could  not  go  to  the  Gov- 
ernment.  The  Government  has  nothing  to  do  with  Home  Goods 

Your  reaction  against  this  fact — the  fact  that  the  whole  of 
the  Protective  Branch  of  the  Tariff  goes  into  private  pockets, 
and  is  designed  wholly  for  the  enrichment  of  private  individuals 
— depends  wholly  upon  the  degree  of  your  personality,  wholly 
upon  the  extent  to  which  you  are  a  real,  red-blooded,  100% 
American.  If  the  "yellow  streak"  of  the  slave,  of  the  servile, 
the  cowardly  and  the  base,  is  still  too  strong  in  your  nature;  if 
you  have  not  evolved  far  enough  into  the  realm  of  independent 
personality;  then  you  will  go  on  voting  and  working  and  talking 
for  the  Protective  Branch  of  the  Tariff. 

That  is  the  issue.  Now  just  what  is  your  response?  Is  it 
the  response  of  a  freeman,  of  a  real  American,  whether  man  or 
woman— or  is  it  the  response  of  a  cowering,  abject  serf  and 
slave?  I  have  done  my  part  as  an  American  citizen  by  giving 
you  the  facts,  the  undeniable  facts.  The  rest  lies  wholly  with 
you.  What  will  be  your  answer  at  the  polls?  For  the  polls 
are  the  real  test  of  personality. 


32  TARIFF  PRIMER 


CHAPTER  XI. 
The  Higher  the  Rate— The  Less  the  Revenue 

When  I  call  a  man's  attention  to  the  fact  that  there  has  been 
a  tendency  to  increase  the  rate  with  each  successive  Tariff  Bill, 
he  says,  "Well,  the  expenses  of  the  Government  are  increasing 
all  the  time.  And  so  they  would  have  to  raise  Tariff  rates  in 
order  to  raise  more  revenue," 

To  which  I  answer:  To  INCREASE  THE  TARIFF  RATE 
Does  Not  Increase  the  Revenue.  On  the  contrary,  it 
diminishes  it.  The  whole  truth  is  that  the  higher  the  tariff 
rate — after  you  get  beyond  a  certain  point — the  less  the  revenue 
it  raises — for  the  Government.  If  the  tariff  rate  is  made  so 
high  as  to  becom.e  prohibitive — as  is  the  case  on  scores  and 
hundreds  of  articles  under  the  Fordney-McCumber  Tariff — then 
it  yields  no  revenue  at  all.  That  is,  it  will  yield  no  revenue  for 
the  Government,  Tho  IT  MAY  YIELD  HUNDREDS  OF  MILL- 
IONS FOR  Private  Pockets. 

And  so  there  is  a  direct  conflict  between  Protection  and 
Revenue.  It  is  a  conflict  that  exists  not  simply  in  the  minds 
of  men.  IT  Is  A  FACT  OF  NATURE.  It  is  grounded  deep  in 
the  industrial  order.  Each  system  of  Tariff,  to  the  extent  that 
it  is  applied,  excludes  the  other.  This  seems  to  be  the  law: 
To  THE  Extent  that  Any  Tariff  Yields  Protection, 
It  Does  Not  Yield  Revenue.  To  the  Extent  That 
It  Yields  Revenue,  It  Does  Not  Yield  Protection. 

Suppose,  for  example,  that  the  Tariff  on  a  given  product  in- 
creases its  cost  to  the  people  one  hundred  million  dollars.  Let 
us  call  this  our  "Tariff  Fund."  Now  comes  the  question: 
What  portion  of  this  hundred  million  dollars  will  go  into  the 
Public  Treasury,  and  what  portion  will  go  into  Private  Pockets? 

The  answer  is  this:  If  the  Tariff  be  levied  on  a  product  not 
produced  in  this  country,  then  all  of  it  will  go  to  the  Govern- 
ment. But  if  it  be  levied  upon  a  foreign  product  competing 
with  a  similar  home  product,  Then  THE  DISTRIBUTION  V;'lLL 
Depend  on  the  Part  of  the  Total  Demand  Which 
Is  Supplied  By  Each. 

For  instance,  if  three-fourths  of  the  demand  for  the  given 
product  be  supplied  by  foreign  producers,  then  $75,000,000  will 


The  IligJier  the  Rate — the  Lens  the  Revenue  33 

go  to  the  Government,  and  the  remaining  $25,000,000  of  the 
increased  cost  of  this  product  to  the  people — due  to  the  Tariff — 
will  go  into  the  pockets  of  the  American  Producers  of  that  com- 
modity. If  only  half  of  the  demand  is  supplied  by  the  foreign 
product,  and  the  remainder  by  the  competing  home  product, 
Then  One-half  of  This  Tariff  Fund  Will  CxO  As  a 
Bonus  to  the  American  Manufacturers  and  Mine 
Owners. 

But  if  the  tariff  rate  should  be  so  high  as  to  largely  prohibit 
the  foreign  product,  so  that  it  supplies  only  one-fourth  of  our 
demand  for  the  particular  goods,  then  only  TWENTY-FIVE 
Millions  out  of  the  One  Hundred  Millions  of  the  in- 
creased cost  to  the  people — because  of  the  Tariff — would  go  to 
the  Government.  The  remaining  Seventy-FIVE  MILLION 
Dollars  will  go  into  the  pockets  of  the  American  Producer. 

Go  on  up  with  the  tariff  rate.  Make  it  so  high  that  no  For- 
eign Goods  of  this  particular  class  can  come  in.  Then  of  the 
hundred  millions  increased  cost  of  this  product  to  the  people, 
because  of  the  Tariff,  not  a  dollar  will  go  to  the  Government. 
The  whole  of  it  will  go  into  private  pockets.  AND  HERE  WE 
See  One  of  the  Methods  At  Least  By  Which  Mill- 
ionaires Are  Made. 

Thus  do  high  tariff  rates,  instead  of  yielding  more  revenue 
to  the  Government,  yield  less.  In  fact,  there  are  two  condi- 
tions under  which  the  Tariff  will  not  yield  sufficient  revenue  to 
the  Government.  One  is  to  make  the  rate  so  low  that  it  is  not 
adequate  for  the  quantity  of  Foreign  Goods  coming  in.  The 
other  is  to  make  it  so  high  that  it  shuts  out  all  Foreign  Goods, 
thus  yielding  no  revenue  at  all.  And  this  will  be  practically 
true  of  the  Tariff  Wall  just  built,  the  highest  in  our  history,  un- 
less Trusts  and  Gentlemen's  Agreements  enable  our  manufac- 
turers to  boost  the  cost  of  Home  Goods  to  us  up  to  the  Tariff 
Price  Level  of  Foreign  Goods. 

This  fact  annihilates  another  delusion  heard  on  every  hand. 
When  we  call  attention  to  the  enormous  taxation  of  the  people 
thru  the  Fordney-McCumber  Tariff,  some  one  answers:  "But 
we  are  a  patriotic  people  and  are  willing  to  be  taxed  to  support 
our  government,  and  ought  to  be  taxed  to  support  it." 

To  which  I  answer:  Quite  true.  As  patriotic  citizens  we 
ought  to  be  willing  to  be  taxed  for  the  support  of  the  Govern- 
ment, wisely  and  economically  administered.  But  this  does 
not  all  go  to  the  Government — not  half  of  it,  or  even  a  fourth 
of  it  goes  to  the  Government.     In  fact,  about  nine-tenths  of 


34  TARIFF  PRIMER 

the  hundreds  of  milhons  of  dollars  which  the  Fordney-McCum- 
ber  Tariff  will  tax  out  of  the  pockets  of  the  American  people 
will  go,  not  to  the  support  of  the  Government,  but  to  the  sup- 
port and  further  enrichment  of  those  whom  the  Protective 
Tariffs  of  the  past  have  already  made  rich. 

These  statements  as  to  the  fractional  part  of  the  millions  the 
Fordney-McCumber  Tariff  will  filch  from  our  pockets  that  the 
Government  will  get,  are  far  from  being  fanciful.  They 
are  based  on  the  fact  that,  according  to  Mr.  Fordney  himself, 
only  8%  of  all  that  we  consume  in  this  country  is  imported  from 
abroad.  The  remaining  92%  of  our  consumption  we  produce 
directly  for  ourselves.  Therefore,  about  nine-tenths  of  the  in- 
creased cost  of  the  necessities  of  life  to  us,  because  of  a  High 
Tariff  Wall,  goes  into  the  pockets  of  our  Tariff  Barons — one 
dollar  for  the  Government,  nine  for  them!  No  wonder  they 
are  willing  to  contribute  so  liberally  towards  the  election  of  the 
men  who  made  these  "blessings"  of  Protection  possible /or  them. 

In  other  words — looking  at  the  grand  total  of  the  loot  to  be 
gathered  in  by  this  colossal  Scheme  of  Plunder — the  Fordney- 
McCumber  Tariff,  in  order  to  raise  some  $300,000,000  for  the 
Government,  will  take  from  the  people  every  year  about  ten 
times  this  amount,  or  $3,000,000,000!  Of  this  three  billions 
extorted  from  the  people  in  the  increased  cost  of  the  necessities 
of  life,  only  about  $300,000,000  will  go  to  the  Government. 
The  remaining  $2,700,000,000  will  go  into  Private  Pockets. 
And  even  these  figures  are  far  below  those  made  by  the  experts 
of  the  Treasury.  Nothing  more  heinous  and  damnable  than 
that,  in  principle,  has  ever  been  enacted  in  the  history  of  the 
world. 

Thus  are  we  being  plundered,  oppressed  and  impoverished  by 
the  inordinate  and  extortionate  rates  of  the  Fordney-McCum- 
ber Tariff — taxed  on  practically  everything  we  eat,  drink  or 
wear — not  for  the  support  of  the  Government,  But  FOR  THE 
Support  and  Enrichment  of  Private  Individuals. 


Who  Gets  It — Employees  or  Employers?  35 


CHAPTER  XII. 

Who  Gets  It — Employees  or  Employers? 

We  have  thus  far  established  four  great  and  cardinal  truths, 
four  vital  facts: 
First:     that  a  tariff  "protects"  by  increasing  the  cost  of  those 

material  products  which  mankind  must  consume  in 

order  to  live. 
Second:     that  this  increased  cost  is  paid  by  the  consumers  of 

these  products. 
Third:    that  the  increased  cost  of  Foreign  Goods,  due  to  the 

Tariff,  goes  into  the  Public  Treasury. 
Fourth:    that  the  increased  cost  of  Home  Goods,  due  to  the 

Tariff  on  Foreign  Goods,  goes  into  Private  Pockets. 
In  these  four  propositions  we  have  a  basis  for  our  reasoning 
as  definite  and  valid  as  any  proposition  in  Geometry,  as  con- 
crete and  tangible  as  any  rule  of  Arithmetic. 

The  increased  cost  of  Home  Goods — like  the  increased  cost 
of  Foreign  Goods — is  paid  wholly  by  Home  Consumers  and 
goes  into  Private  Pockets.  That  much  is  certain.  Now  comes 
the  question:  Whose  pockets?  In  other  words:  Who  gets  it? 
That  contented  and  prosperous-looking  gentleman  our  artist 
has  sketched  for  us,  and  into  whose  large  vault  labor  is  shovel- 
ing the  gold  which  the  Tariff  has  brought  him — just  who  is  he? 
Is  he  a  farmer,  blacksmith,  banker,  manufacturer,  coal  miner, 
section  hand?     Just  who  is  he? 

Perhaps  we  can  get  at  the  matter  more  directly  by  asking: 
Whom  does  he  represent?  Whom  do  you  think  he  represents? 
This  is  your  problem  just  as  much  as  it  is  mine.  Think  it  out 
for  yourself.  Do  you  think  our  artist  designed  him  to  repre- 
sent labor — the  tens  of  millions  of  American  people  who  toil 
and  serve  for  wages  and  salaries?  Or  does  he  represent  the 
employers  of  labor?  He  cannot  possibly  represent  both.  There- 
fore, he  must  represent  either  the  Employing  Classes  or  the 
Working  Classes:    Which  is  it? 

If  he  represents  the  Employing  Class,  then  the  next  question 
is :  Does  he  represent  all  who  are  the  employers  of  labor,  or  only 
certain  groups  of  them?  And  if  the  latter,  then  which  group 
of  employers  does  he  represent? 


36  TARIFF  PRIMER 

Wealth  consists  of  food,  clothing,  shelter,  luxuries  and  all 
other  material  things  which  satisfy  human  desires  and  minister 
to  human  needs.  In  reference  to  all  these  things,  and  to  all 
other  material  products  which  go  to  make  up  what  we  call  "the 
necessities  of  life,"  all  mankind  are  Consumers. 

But  while  all  mankind  are  the  Consumers  of  wealth,  and  while 
all  forms  of  wealth  are  the  products  of  human  toil,  not  all,  or 
even  half,  of  mankind  are  specifically  engaged  in  the  production 
of  Wealth.  In  other  words,  while  the  whole  of  our  110,000,000 
people  are  Consumers,  they  are  not  all  Producers. 

In  reference  to  the  actual  production  of  wealth,  the  American 
people — and  all  other  peoples — can  be  divided  into  two  distinct 
classes:  Producers  and  Non-Producers.  I  am  not  saying  that 
those  here  classed  as  Non-Producers — do  not  earn  the  food, 
clothing,  shelter,  comforts  and  luxuries  which  they  consume. 
I  am  simply  saying  that  they  do  not  produce  them.  All  are 
Consumers  of  wealth;  only  a  comparatively  few  are  Producers 
of  wealth. 

The  Non-Producers  of  wealth  fall  into  two  classes:  (1) 
Those  engaged  in  various  forms  of  professional  service — law- 
yers, doctors,  editors,  teachers,  preachers,  writers,  lecturers, 
musicians,  servants,  entertainers,  nurses,  etc.  (2)  Those  not 
engaged  in  any  "gainful  occupation,"  but  living  on  fixed  in- 
comes derived  from  various  sources.  The  Non-Producers  of 
wealth  constitute  over  half  of  our  110,000,000  people.  So  far 
as  the  necessities  of  life  are  concerned,  they  are  not  Producers 
but  Consumers.  Therefore,  the  Fordney-McCumber  Tariff 
cannot  possibly  be  of  any  direct  benefit  to  them.  They  have 
no  products  whose  price  it  can  increase.  To  them  it  means  not 
"protection"  but  plunder,  not  a  blessing  but  a  burden,  by  in- 
creasing the  cost  of  the  necessities  of  life;  thus  reducing  their 
salaries  BY  REDUCING  THEIR  PURCHASING  POWER. 

Of  the  four  classes  into  which  Wealth  Producers  can  be  logic- 
ally divided,  the  millions  engaged  in  merchandising,  banking, 
and  general  commerce — including  both  Employers  and  Em- 
ployees; and  the  millions  more  engaged  in  railroading  and  trans- 
portation, from  the  President  of  the  company  down,  cannot 
possibly  receive  any  direct  benefit  from  Mr.  Fordney's  High 
Tariff. 

There  are  two  reasons  why  it  cannot  benefit  them.  First, 
because  the  tendency  and  purpose  of  all  High  Tariff  Walls  is 


Who  Gets  It — Employees  or  Employers?  37 

to  obstruct  and  prevent  trade,  while  their  business  is  trade,  com- 
merce— Exchange.  Second,  because  they  produce  no  goods 
whose  price  the  tariff  enhances.  It  increases  the  price  of  all 
the  goods  and  products  which  they  must  sell  and  transport  to 
the  people.  To  that  extent  it  diminishes  the  amount  of  goods 
and  products  the  people  will,  or  can,  consume — hence  it  dimin- 
ishes the  volume  of  their  sales  and  so  of  the  goods  to  be  trans- 
ported. 

Furthermore,  since  it  increases  the  cost  of  the  necessities  of 
life  which  these  millions  of  our  people  must  consume,  both  em- 
ployees and  employers,  the  Fordney-McCumber  Tariff  means 
to  them  also  only  taxation  and  plunder. 

A  very  little  reflection  of  the  subject  ought  to  show  any  in- 
telligent man  or  woman  that  the  direct  benefits  of  High  Tariffs 
are  necessarily  limited  exclusively  to  those  WHO  PRODUCE 
Goods  to  Sell.  It  must  act  To  the  Detriment  of 
Those  Who  Have  Goods  to  Buy. 

This  makes  it  necessary  to  divide  the  25,000,000  of  our  people 
• — according  to  the  census  of  1920— directly  engaged  in  the  pro- 
duction of  agricultural,  manufacturing,  forest  and  mineral 
products  into  two  classes:    Employers  and  Employees. 

While  the  millions  of  workers,  of  employees,  in  these  two 
classes  of  Wealth  Producers  are  directly  engaged  in  the  produc- 
tion of  wealth,  THEY  HAVE  NO  WEALTH  TO  SELL.  _  They 
have  it  to  Buy.  The  only  thing  they  have  to  sell  is  their  labor 
—which  is  not  sold  in  the  GOODS  MARKET  but  in  the  LABOR 
Market.  And  for  the  Labor  Market  there  are  no  Tariff  Walls. 
They  are  built  exclusively  for  the  GOODS  MARKET. 

Therefore,  in  reference  even  to  the  thousands  of  forms  of 
wealth  which  their  own  brain  and  hand  have  fashioned  they 
are  not  sellers  but  buyers.  The  products  of  their  toil  pass  at 
once  out  of  their  hands  into  the  hands  of  their  employers. 
Hence,  commercially  speaking,  they  are  not  Producers  but  Con- 
sumers— consumers  even  of  the  very  things  which  they  them- 
selves have  produced. 

Thus,  the  direct  beneficiaries  of  a  Tariff  Wall  are  limited 
wholly  to  the  Employing  Class;  to  the  owners  of  the  finished 
products  of  labor — and  therefore  vitally  concerned  in  their 
Selling  Price.  To  increase  the  selling  price  for  their  com- 
modities is  the  purpose,  and  the  only  purpose,  for  which  Tariff 
Walls  in  all  lands  are  built. 

By  thus  limiting  the  field  of  the  possible  direct  benefits  of  a 
Tariff  Wall  wholly  to  the  above  Employing  Classes,  we  have 


38  TARIFF  PRIMER 

reduced  the  total  number  of  its  beneficiaries,  even  from  the 
25,000,000  with  which  we  started,  down  to  something  like 
5,000,000 — about  5%  of  the  total  population.  The  remaining 
105,000,000  of  the  American  people  are  not  its  beneficiaries  but 
its  victims.  And  it  is  these  five  million  Employers  whom  the 
prosperous-looking  gentleman  at  the  vault  represents. 

It  ought  to  be  observed,  in  passing,  that  while  President 
Harding  vetoed  the  Soldier  Bonus  Bill,  because  he  said  it  was 
taxing  110,000,000  people  for  the  benefit  of  about  five  millions, 
he  did  not  veto  the  Tariff  Bill,  which  will  tax  these  same  110,- 
000,000  American  people  for  the  benefit  and  enrichment  of  far 
less  than  five  million  employers. 

The  Soldier  Bonus  would  have  been  no  more  of  a  "raid"  on 
the  pockets  of  the  people  than  is  the  Tariff  Bonus.  The  num- 
ber to  be  benefited  was  far  greater,  and  the  amount  to  be  taken 
out  of  the  pockets  of  the  people  would  have  been  vastly  less  in 
the  end.  Surely  these  Tariff  Barons — who  for  decades  have 
been  fattening  at  the  Public  Crib — have  no  such  claim  on  our 
gratitude,  our  admiration  and  our  generosity  as  have  the  heroes 
and  veterans  of  the  World  War. 

These  veterans  of  the  late  war,  whose  valor  and  indomitable 
courage  in  battle  astounded  the  world — under  the  Tariff  Bonus 
just  passed — are  now  to  be  taxed,  and  at  extortionate  rates, 
on  all  the  necessities  of  life — on  practically  everything  they  and 
their  dependents  eat,  drink  and  wear — in  order  to  pay  tribute  to 
the  ruthless  greed  of  the  Profiteers  who  made  colossal  fortunes 
in  the  war  for  Democracy  while  they  were  fighting  in  France. 

Returning  to  the  main  argument,  allow  me  to  repeat  that  it 
is  not  labor,  but  the  employers  of  labor,  into  whose  pockets 
flows  that  huge  stream  of  wealth  arising  from  the  increased 
price  of  Home  Goods,  due  to  a  Tariff  on  Foreign  Goods.  But 
this  does  not  include  any  of  the  employers  of  labor  in  the  first 
class  of  Non-Producers — those  engaged  in  Professional  Occu- 
pations. Neither  does  it  include  any  of  the  employers  of  labor 
engaged  in  railroading.  Nor  the  employers  of  labor  engaged 
in  merchandising,  banking,  shipping  and  general  commerce. 

The  benefits  of  the  Tariff  must  necessarily  be  limited  wholly 
to  those  employers  engaged  in  Farming,  Manufacturing,  Min- 
ing, Lumbering,  Fisheries,  etc.  In  other  words,  the  "blessings" 
of  a  Protective  Tariff  are  limited  exclusively  to  those  who  em- 
ploy labor  for  the  direct  production  of  wealth — AND  WHO 
Are  the  Owners  of  the  Finished  Products  of  their 
Employees. 


Who  Gets  It — Employees  or  Employers?  39 

Furthermore,  employers  of  labor  engaged  in  agriculture,  as 
will  be  shown  later  on,  are  not  the  beneficiaries  but  the  dupes 
of  "Protection."  Unfortunately  for  themselves,  for  the  agri- 
cultural population,  and  for  the  whole  consuming  public  they 
think  they  are  benefited — and  so  by  their  votes  have  perpetu- 
ated this  colossal  Scheme  of  Plunder.  No  definition  of  graft 
and  plunder  can  be  given  which  will  not  include  that  stream  of 
wealth,  flowing  into  Private  pockets,  which  High  Tariffs  are 
designed  to  make  possible. 

From  this  analysis  we  realize  that  only  about  one  in  twenty 
of  our  people,  or  of  any  people,  can  possibly  be  benefited  and 
enriched  by  a  Protective  Tariff.  The  remaining  105,000,000, 
and  more,  of  our  total  population,  are  not  its  beneficiaries  but 
its  victims.  They  are  not  the  Producers  but  the  Consumers 
of  the  products  whose  prices  the  Tariff  is  designed  to  increase. 

So  far  as  the  Tariff  is  concerned  the  interests  of  Producers 
and  Consumers  are  in  direct  conflict. 

It  Is  Mathematically  Impossible  for  Any  Law,  or 
Economic  Policy,  to  Increase  the  SELLING  PRICE 
FOR  THE  Producers  of  Any  Given  Product,  Without 
At  the  Same  Time,  and  to  the  Same  Extent,  Increas- 
ing the  cost  price  to  its  Consumers. 

The  Consumer  must  pay  what  the  Producer  gets.  There- 
fore, any  law  directly  to  the  benefit  of  the  one,  by  increasing  the 
price  of  his  commodities,  must  be  to  the  detriment  of  the  other. 
Here,  then,  is  a  fundamental  principle  as  true  and  universal  as 
any  rule  of  Arithmetic.  It  holds  everywhere,  in  all  lands  and 
climes.  And  upon  this  eternal  truth  of  economics  we  shall  base, 
and  have  based,  all  our  reasoning. 

What  utter  absurdity,  then,  is  the  claim  of  Messrs.  Fordney 
and  McCumber  that  by  building  the  highest  Tariff  Wall  in 
our  history  they  will  benefit  alike  both  Producers  and  Con- 
sumers. As  well  say  that  in  sawing  a  board  in  two  pieces,  you 
can  increase  the  length  of  one  piece  without  diminishing  the 
length  of  the  other  piece;  that  one  child  on  the  end  of  a  see-saw 
can  go  up  without  the  other  going  down;  that  matter  can 
put  in  one  place  without  being  taken  from  another. 

These  absurd  propositions  are  no  more  preposterous,  no 
more  irrational  and  contradictory,  than  the  claim  of  Protec- 
tionists that  they  can  add  hundreds  of  millions  of  dollars  to  the 
profits  of  the  Manufacturers  without  taking  them  from  the  pur- 
chasers of  their  goods.  In  other  words,  that  they  can  increase 
the  Selling  Price  for  the  Producer  without  increasing  the 
Cost  Price  to  the  Consumers  of  his  products. 


40  TARIFF  PRIMER 


CHAPTER  XIII. 
Does  the  Tariff  Protect  or  Plunder  Labor? 

A  little  reflection  on  the  meaning  and  significance  of  the  pic- 
ture on  the  opposite  page  cannot  fail  to  result  in  a  most  start- 
ling surprise.  In  fact,  it  quite  upsets  all  our  ideas  and  under- 
standing in  reference  to  the  Tariff.  We  have  been  told  from 
childhood  that  the  chief  reason — and  practically  the  only  rea- 
son— for  building  our  American  Tariff  Wall  is  to  "protect" 
American  Labor  from  the  competition  of  the  "cheap,  pauper 
laborers"  of  Europe. 

Of  course  the  very  first  requirement  in  order  to  do  this  is 
to  keep  them  out.  But  when  we  look  at  this  picture  we  see  that 
instead  of  keeping  them  out,  instead  of  protecting  our  own 
wage  earners  right  here  at  home  from  their  competition,  the 
Tariff  Wall  is  so  built  that  they  can  pass  right  thru. 

That  Tariff  Wall  keeps  Foreign  Goods  out,  or  can  keep  them 
out.  Why?  Because  they  would  compete  with  the  goods  of 
our  own  manufacturers — the  Employing  Class.  But  the 
hundreds  of  thousands  whose  hands  produce  these  Foreign 
Goods— well,  that  is  different!  They  can  come  in — and  have 
come  in  by  the  millions.  The  more  that  come  in  the  cheaper 
our  manufacturers  can  get  their  labor.  And  so  we  see  them 
coming  thru  that  mighty  Tariff  Wall  just  as  if  it  had  been  built 
as  a  Royal  Arch  to  welcome  them. 

Even  passing  the  point  of  foreign  immigration,  can  a 
Tariff  benefit  labor?  I  pause  for  a  reply.  Ask  your  Congress- 
man, your  Senator — ask  anybody.  And  if  anybody  can  tell 
you  how,  please  be  good  enough  to  send  the  answer  to  me. 

The  increased  cost  of  Home  Goods,  due  to  the  Tariff  on  For- 
eign Goods,  goes  into  Private  Pockets.  But  what  has  the 
laborer  to  sell  upon  which  there  is  a  Tariff  to  increase  its  price? 
The  only  thing  the  wage  earners  and  day  laborers  of  America, 
or  of  any  other  country,  have  to  sell  is  their  labor.  BUT  THERE 
Is  No  Tariff  on  Labor.  Labor  is  on  the  Free  List.  The 
Tariff  is  on  the  products  of  labor.  But  the  products  of  labor, 
alas,  do  not  belong  to  the  laborers. 

The  Products  of  Labor  Pass  Out  of  the  Hands 
THAT  Produce  Them  Into  the  Hands  of  Their  Em- 


Does  the  Tariff  Protect  or  Plunder  Labor?  41 

PLOYERS.  And  SO  it  is  not  the  employee,  but  the  employer, 
who  has  the  products  to  sell  which  the  Tariff  increases — and 
often  doubles — in  price.  Again  we  see  that  it  is  not  the  em- 
ployees, the  wage  earners,  but  the  employers — THE  OWNERS 
OF  THE  Finished  Products— who  can  possibly  be  benefited 
and  enriched  by  a  Protective  Tariff. 

Tariff  Walls  in  all  lands  are  for  the  exclusive  benefit  and 
"protection"  of  the  Goods  Market — ^the  market  in  which  The 
Interests  sell  all  their  products.  The  only  thing  which  labor 
has  to  protect  its  market  are  Labor  Unions.  And  so  it  is  not 
the  Wages  of  Labor  But  the  Cost  of  Goods  that  the 
Tariff  is  designed  to  increase,  or  can  increase. 

In  other  words,  The  System  is  this — Free  Trade  for  Labor: 
Protection  for  the  products  of  labor.  What  is  true  of  labor  in 
this  country  under  Protective  Tariffs  is  true  in  every  other. 
Protection  is  nothing  less  than  that  pernicious  and  loathsome 
thing,  called  Class  Legislation.  It  is  legislation  for  the  benefit 
and  enrichment  of  certain  groups  of  the  Employing  Class,  at 
the  expense  and  to  the  detriment  of  the  Working  Classes.  Such 
a  "policy"  does  not  belong  to  Democracies  but  to  Despotisms. 

No  Tariff  Wall,  tho  it  tower  to  the  skies,  can  possibly  benefit 
the  millions  of  wage  earners  who  toil  on  farms  and  in  forests, 
factories,  quarries,  fisheries  and  mines.  Why  not?  Because 
they  have  none  of  the  things  which  their  own  toil  produces  to 
sell.  They  do  not  own  them  and  never  get  possession  of  them. 
In  fact.  They  Have  Them  to  Buy.  Therefore,  every  in- 
crease which  the  Tariff  makes  in  the  cost  of  the  products  of 
labor,  by  so  much  decreases  the  wages  EVEN  OF  THE  LABOR- 
ERS Who  Produce  Them. 

Protectionists  assure  us  that  the  manufacturer,  in  return  for 
all  these  manifold  opportunities  for  -price-fixing  offered  him  by 
the  Fordney-McCumber  Tariff— out  of  the  gratitude  of  his  lov- 
ing heart — will  voluntarily  increase  the  ivages  of  his  employees, 
at  the  same  time  that  he  is  increasing  the  price  of  his  product  to 
the  consuming  public. 

Even  if  the  manufacturers  of  this  country  should  be  so  moved 
by  the  unparalleled  generosity  of  Fordney  &  McCumber  in 
taking  money  out  of  the  pockets  of  the  people  to  go  into  their 
pockets,  as  to  voluntarily  increase  the  wages  of  their  employees, 
what  are  the  chances  that  they  would  increase  wages  as  much 
above  the  NORMAL  MARKET  PRICE  OF  LABOR  as  the  Tariff 
enabled  them  to  increase  the  price  of  their  products  above  THE 
Normal  Market  Price?    What  are  the  chances  that  they 


42  TARIFF  PRIMER 

will  do  this?  A  thousand  to  one  that  they  will  not.  And  so 
labor  will  be  the  loser.  The  increase  in  their  wages  would  not 
be  equal  to  the  increase  in  their  cost  of  living! 

I  have  seen  our  coal  miners  in  Pennsylvania  again  and  again 
strike  for  higher  wages,  for  increased  pay — and  get  it.  But 
they  had  to  buy  in  the  Company  Store.  And  so  when  they 
settled  the  strike  and  returned  to  work,  they  found  that  prices 
in  the  Company  Store  had  been  increased  even  more  than  their 
wages.  And  that  is  the  Tariff  Game.  We  all  must  buy  at  the 
"Company  Store."  They  set  the  prices.  We  must  pay  them 
— or  freeze  and  starve! 

In  reference  to  all  these  fanciful  and  delusive  claims  and 
"arguments"  about  employers  voluntarily  raising  wages,  there 
is  one  important  distinction  to  be  noted :  While  the  Tariff  en- 
ables its  beneficiaries  to  pay  higher  wages — far  higher — it  does 
not  compel  them  to  pay  higher  wages.  And  it  is  that  distinc- 
tion between  "enabling"  to  do  this,  and  "compelling"  to  do 
this,  which  made  it  possible  for  Carnegie  and  scores  of  other 
"protected"  manufacturers  to  retire  from  the  business  with 
their  millions,  some  of  them  with  their  tens  of  millions,  and  a 
few  of  them  with  their  hundreds  of  millions.  That  was  what 
did  it. 

Nor  can  a  Protective  Tariff  increase  the  amount  of  employ- 
ment. It  never  gave  labor  a  job,  and  never  will — except  that 
indicated  in  the  picture  of  shoveling  the  gold  into  the  Tariff 
Baron's  vaults.  It  can  change  the  direction  of  the  employment, 
but  it  cannot  increase  the  amount  of  employment.  How  could  it? 

Does  increasing  the  price  of  woolen  goods  and  cotton  goods 
increase  or  diminish  the  amount  of  these  goods  which  the  people 
will  buy?  And  so  of  all  other  goods  and  products.  Answer  the 
question  for  yourself.  The  only  result  of  increasing  the  cost  of 
all  these  things  is  to  create  a  "buyers'  strike"  among  the  people. 
Thus  does  the  Tariff  diminish  the  demand  for  labor  instead  of 
increasing  it.     There  is  less  employment  instead  of  more. 

Furthermore,  a  Protective  Tariff  reduces  the  wages  and  sal- 
aries of  all  employees  in  all  lines  of  industry.  How  do  they  do 
this?  By  Reducing  Their  Purchasing  Power.  When 
President  Harding  on  Sept.  21,  1922,  signed  the  Fordney-Mc- 
Cumber  Tariff  Bill,  he  automatically  reduced  the  wages  and 
salaries  of  every  man  and  woman  working  in  office,  store,  forest, 
factory  or  mine,  and  of  the  whole  agricultural  population  BY 
Reducing  the  Amount  of  the  Necessities  of  Life 
Which  Their  Incomes  Will  Purchase. 


Does  the  Tariff  Protect  or  Plunder  Labor?  43 

No  man  or  woman  who  will  really  think  upon  the  subject 
can  deny  this  proposition.  In  what  a  confused  and  pitiful 
situation,  then,  is  the  mind  of  American  Labor.  A  proposal 
to  reduce  wages  in  any  industry  5% — or  10%  at  the  most — 
causes  labor  to  go  on  a  strike.  They  make  the  very  just  claim 
that  they  have  the  right  to  a  living  wage.  And  they  have. 
Every  toiler  should  have  a  living  wage — AND  SOMETHING 
More. 

On  the  other  hand,  apparently  scores  of  labor  unions  peti- 
tioned Congress  to  hasten  the  enactment  of  the  present  mon- 
strosity of  oppression  and  plunder,  this  embodiment  into  law 
of  the  unbridled  greed  and  rapacity  of  the  race,  known  as  the 
Fordney-McCumber  Tariff.  Thus  does  labor  appeal  to  force 
against  a  proposition  to  reduce  wages  even  5%,  but  it  eagerly 
votes  for  a  proposition  which  will  reduce  its  wages  in  many 
cases  10  times  this  amount — By  REDUCING  THEIR  PUR- 
CHASING Power. 

When  all  the  facts  in  the  case  have  been  presented  to  Ameri- 
can Labor  as  to  the  real  meaning  of  High  Tariffs  to  all  who  toil, 
I  have  the  utmost  confidence  in  the  conclusion  which  the  tens 
of  millions  of  employees,  both  men  and  women,  will  reach  and 
in  the  results  which  will  follow  at  the  polls. 

Nevertheless,  the  fact  largely  remains  that  this  colossal 
scheme  of  compelling  labor  to  sell  under  Free  Trade  and  buy 
back  under  Protection — so  cunningly  devised  to  plunder  and 
impoverish  all  who  work  for  salary  or  wages — American  labor 
has  supported  by  its  vote  decade  after  decade.  In  the  hands 
of  labor  there  is  the  greatest  weapon  that  Civilization  can  give 
— the  Ballot.  Whether  or  not  the  workers  of  America  will 
continue  to  vote  for  the  enrichment  of  the  few  thru  the  taxation 
and  enslavement  of  themselves  and  their  families  remains  to 
be  seen. 


44  TARIFF  PRIMER 


CHAPTER  XIV. 
The  Farmer  and  the  Manufacturer 

Having  eliminated  all  possibility  of  day  laborers,  or  any 
other  classes  of  employees,  being  the  possible  beneficiaries  of  the 
gigantic  piece  of  Class  Legislation  just  enacted  at  Washington, 
let  us  now  turn  to  the  five  million  employers  of  labor  who  are 
possible  beneficiaries  of  the  Tariff,  and  see  what  are  the  chances 
of  either  farm  owners  or  farm  tenants  to  be  among  the  Favored 
Few  into  whose  pockets  the   Tariff  pours  its  golden  stream. 

Between  farmers  and  manufacturers,  so  far  as  the  Tariff  is 
concerned,  there  is  not  unity  but  conflict  of  interesi.  It  is  true 
that  the  products  of  both  the  farmer  and  the  manufacturer  are 
now  highly  "protected."  Up  until  1883,  but  few  products  of 
the  farm  were  favored  by  Tariffs.  The  great  revolt  of  the 
farmers  of  the  West  against  the  oppression  and  plunder  of  High 
Tariffs  had  its  beginning  about  that  time. 

Then  the  manufacturers  of  the  East  got  a  brilliant  idea: 
"Why  not  give  the  farmer  a  tariff  on  all  his  products?  Of 
course  it  will  not  benefit  him,  but  he  will  tJiink  that  it  does. 
His  vote  will  benefit  and  perpetuate  our  system."  Then  it  was 
that  taxes  were  levied  on  practically  all  farm  products.  In  the 
Tariff  of  1883,  "protective"  rates  were  levied  on  wheat,  oats, 
barley,  hay,  rice,  corn,  potatoes,  hogs,  cattle,  flour,  onions, 
bacon  and  ham.  And  that  "policy"  has  been  continued  ever 
since.  The  rates  in  the  Fordney-McCumber  Tariff  on  the 
Farm  Products  are  as  high,  and  in  some  few  instances  higher, 
than  those  of  any  previous  "protective"  measure. 

All  the  wealth  of  the  world  comes  out  of  the  ground.  Of  the 
four  classes  of  Wealth  Producers  engaged  in  extracting  wealth 
from  the  earth— farmers,  miners,  lumberman  and  fishermen — 
the  farmer  takes  the  lead.  He  produces  all  the  essential  food 
products  which  keep  humanity  from  starving,  and  all  the  raw 
materials  for  the  fabrics  which  clothe  them.  Nevertheless, 
while  the  farmer  thus  produces  the  raw  materials  which  feed 
and  clothe  the  world,  nine-tenths  of  all  that  he  himself  con- 
sumes he  must  buy. 

True  it  is  he  produces  the  raw  materials  of  much  that  he 
consumes.     But  even  if  he  produced  them  all,  their  manu- 


The  Farmer  and  the  Manufacturer  45 

factured  form  he  must  buy.  All  his  clothing  for  himself  and 
family,  all  his  furniture  and  fixtures,  all  the  materials  for  his 
house,  all  his  harness,  machinery,  chemicals,  oils  and  paints; 
all  his  nails,  chains,  fencing  and  other  hardware — all  these  mul- 
titudinous things  he  must  buy.  Even  a  large  part  of  all  the 
foods  for  his  live  stock  he  must  use  in  manufactured  form. 
These,  too,  he  must  buy. 

In  short,  aside  from  milk,  butter,  eggs,  garden  products  and 
a  portion  of  their  meat,  OUR  40,000,000  PEOPLE  ON  AMERI- 
CAN Farms  Must  Buy  Practically  As  Much  of  All 
That  They  Consume  As  Do  the  Dwellers  in  Towns 
AND  Cities.  And  they  must  buy  from  manufacturers.  In 
fact,  it  is  estimated  that  they  buy  46%  of  all  goods  manufac- 
tured in  this  country.  Now  all  these  manufactured  goods  and 
products  will  be  increased  in  price  at  an  appalling  rate  by  the 
Fordney-McCumber  Tariff.  Thus  are  the  people  of  the  coun- 
try, no  less  than  the  people  of  the  city,  the  objects  of  the  extor- 
tions and  plunder  of  Protective  Tariffs.  It  is  out  of  their  pockets 
that  must  come  the  billions  of  tribute  which  Protection  pours 
into  the  pockets  of  our  Tariff  Barons. 

Protectionists  claim  that  while  farmers  are  the  Consumers  of 
certain  products,  they  are  also  the  Producers  of  other  products. 
Therefore,  that  what  they  lose  by  the  increased  cost  which  the 
Tariff  adds  to  the  things  they  must  buy,  will  be  fully  made  up 
to  them  in  the  increased  price  which  it  will  give  them  for  the 
things  they  have  to  sell. 

It  is  quite  true  that  they  are  both  Consumers  ajid  Producers. 
But  what  are  the  chances,  the  probabilities — or  even  the  possi- 
bilities— that  the  Tariff  will  increase  the  price  of  the  things 
they  have  to  sell  as  much  as  it  will  increase  the  cost  of  the 
things  they  have  to  buy?  Well,  the  chances  are  at  least  a 
thousand  to  one  that  farmers  will  not  get  "equal  protection," 
or  anything  approaching  equal  benefits,  with  the  manufac- 
turers. 

In  the  first  place,  the  rates  on  his  products — with  the  possible 
exception  on  raw  wool  and  an  occasional  item  like  nuts,  citrus 
fruits,  etc. — are  not  nearly  so  high  as  they  are  on  the  hardware, 
woolen  goods,  cotton  goods,  clothing,  women's  and  children's 
dress  goods,  and  hundreds  of  things  which  the  farmer  must  buy. 
Besides,  but  few  farmers  produce  either  wool  or  citrus  fruits. 
And  so  the  market  in  which  the  farmer  buys  is  more  highly  "pro- 
tected" by  tariff  rates  than  the  market  in  which  he  sells.  That 
is  the  first  jolt. 


46  TARIFF  PRIMER 

It  is  a  mathematical  impossibility  for  any  law  to  give  an 
equal  increase  of  price  to  the  products  of  both  the  farm  and  the 
factory.  All  the  chances  are  against  it — and  the  farmer  stands 
to  lose.  To  levy  THE  SAME  TARIFF  Rate  on  the  products 
of  both  farmers  and  manufacturers  will  not  make  the  same  in- 
crease of  price  to  the  public  possible. 

For  example,  a  tariff  rate  of  100%  on  all  products  would  en- 
able the  producer  of  most  manufactured  products  to  increase 
their  price  fully  100%.  But  it  would  not  enable  the  Producer 
of  certain  agricultural  products  to  increase  his  price  even  50%. 
In  a  big  majority  of  cases  it  would  not  enable  him  to  increase 
his  price  at  all. 

Therefore,  even  if  it  were  true  that  farm  products  are  "pro- 
tected" equally  with  the  products  of  the  factory — which  they 
are  not — what  would  be  gained  by  our  agricultural  classes? 
Their  only  hope  would  be  to  come  out  even.  And  the  chances 
are  a  million  to  one  that  they  would  not.  THE  ONLY  WAY 
THE  People  of  Any  Class  Can  Be  Benefited  By  a 
Tariff  Wall  Is  for  It  to  Increase  the  Price  of  the 
Things  they  Have  TO  SELL,  Without  Increasing  the 
Cost  of  the  Things  They  Have  TO  BUY. 

But  since  the  price  of  the  hundreds  and  thousands  of  things 
the  farmer  has  to  buy  were  given  higher  rates,  and  will  be  in- 
creased vastly  more  in  price  by  the  Tariff,  than  his  own  pro- 
ducts can  be,  again  we  see  why  the  American  farmer  always 
has  lost,  and  always  will  lose,  by  Protective  Tariffs. 

On  June  11,  1909,  Senator  Cummins  of  Iowa — who  voted 
against  the  Fordney-McCumber  Tariff — said  on  the  floor  of  the 
Senate:  "I  know  that  my  friend  from  North  Dakota  (Mr.  Mc- 
Cumber)  does  not  agree  with  me  in  respect  to  these  things,  but 
I  do  not  believe  that  we  in  Iowa  receive  any  direct  benefit  for  the 
400,000,000  bushels  of  corn  that  we  raise  every  year;  I  do  not 
believe  that  we  receive  any  direct  benefit  from  the  8,000,000  or 
10,000,000  hogs  that  we  market  every  year;  I  do  not  believe 
that  of  the  $700,000,000  of  agricultural  products  that  we  pour 
every  year  into  the  channels  of  trade  protection  advanced  the 

prices  of  a  tithe  of  them We  will  supply  this  year  the 

people  of  the  United  States  and  of  the  world  with  a  product 
that  will  surpass  in  value  $700,000,000  and  IT  Is  IDLE  FOR 
Even  an  Enthusiast  to  Assert  that  the  Price  of 
These  Products  Is  Directly  Affected  By  the  Pro- 
tective Tariff." 


The  Farmer  and  the  Manufacturer  47 

Therefore,  no  Tariff  however  high,  can  benefit  the  40,000,000 
of  our  agricultural  population.  They  are  the  victims  of  its 
ravenous  cupidity  and  greed — not  its  beneficiaries.  When  the 
American  farmer  comes  to  realize  this  apalling  truth,  this  un- 
deniable fact,  he  will  cease  to  be  any  longer  the  dupe  of  the  de- 
lusive hope  of  getting  prosperity  out  of  a  system  designed  for 
his  own  plunder. 

I  commend  to  the  farmers  of  our  great  country  the  foresight 
and  wisdom  of  the  following  extract  from  an  article  in  the 
"Western  Farmer"  of  Spokane,  appearing  soon  after  the  enact- 
ment of  the  Underwood  Tariff,  Oct.  8, 1913.  It  was  written  by 
the  late  C.  B.  Kegley,  Master  of  the  Washington  State  Grange, 
and  a  man  with  a  vision.     He  said : 

"As  a  system,  Protection  is  doomed.  If  we,  the  farmers, 
stand  for  it,  we  shall  lose  our  share,  and  the  public  believing 
that  it  has  secured  relief  from  the  burden  of  living  cost,  will 
stop  there — causing  whatever  of  loss  occurs  to  fall  all  upon  the 
farmer. 

"Consequently,  the  business-like  course  open  is  for  the 
farmers  to  fight,  not  to  continue  the  system,  but  to  smash  it. 
Fight,  not  to  hold  his  own  questionable  benefits  of  the  Tariff  on 
grain  and  live  stock  and  wool,  BUT  TO  STRIP  THE  COATS  OF 
Privilege  off  the  Back  of  Every  Business  Engaged 
IN  Supplying  the  Necessaries  of  Life." 


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The  Farmer  As  an  Exporter  49 


CHAPTER  XV. 
The  Farmer  as  an  Exporter 

On  the  opposite  page  is  a  table  showing  the  simultaneous  rise 
and  fall  of  the  price  of  wheat  in  Chicago,  Minneapolis,  Duluth, 
Winnipeg,  Toledo,  Kansas  City  and  Liverpool.  The  relative 
prices  are  given  for  the  first  twenty  days  of  July,  1922.  The 
figures  were  furnished  me  by  the  Produce  Exchange  of  New 
York.  The  Liverpool  prices  are  made  according  to  the  rate  of 
exchange  for  each  day,  and  so  are  exact.  Study  this  table, 
think  out  its  meaning,  and  you  will  know  vastly  more  about  the 
Law  of  the  Market  Price  than  you  ever  conceived  of  before.  I 
submit  it  to  the  thought  and  intelligence  of  my  readers  without 
further  comment.  And  in  this  we  have  the  proper  atmosphere 
for  the  opening  of  this  chapter. 

There  are  two  general  reasons  why  even  the  highest  Pro- 
tective Tariff  cannot  increase  the  price  of  things  the  farmer  has 
to  sell  to  the  same  extent  that  it  increases  the  price  of  the  manu- 
factured products  he  has  to  buy — even  if  it  increases  them  at 
all.  In  fact,  there  are  two  general  reasons  why  it  will  not  in- 
crease the  selling  price  of  his  products. 

The  first  is  the  undeniable  fact  that  our  farmers,  as  a  class, 
are  our  greatest  exporters,  producing  nearly  one-half  of  our 
total  exports  to  foreign  lands.  Therefore,  they  must  sell  in 
the  Open  Market  of  the  world,  with  prices  fixed  at  Liverpool, 
England,  an  international  market — the  international  market 
of  the  world  for  farm  products.  They  must  sell  in  competition 
with  the  farm  products  of  all  the  nations  of  the  earth.  No 
Tariff  Wall  can  keep  their  competitors  out  of  that  market.  IT 
Is  THE  Price  of  Farm  Products  in  that  Interna- 
tional Market  Which  Determines  their  Price  in 
Our  Own  Market. 

Our  total  exports  for  1920  were  $8,080,480,821.  This  is  the 
largest  aggregation  of  exports  sent  out  from  its  shores  by  any 
country  on  earth.  Of  these  exports  the  products  of  the  farm 
alone  amounted  to  $3,230,101,784.  This  is  approximately  40% 
of  the  total.  If  to  this  we  add  the  raw  materials  which  go 
directly  into  manufactured  products  for  export,  and  the  price 
of  which  in  the  international  market  necessarily  react  on  the 


50  TARIFF  PRIMER 

price  of  the  farm  products  at  home,  we  then  would  have  over 
half  of  our  exports  supplied  by  our  agricultural  population. 
Of  breadstuffs  alone  we  exported  $1,079,107,701.  The  fol- 
lowing table  shows  something  of  the  farmer's  stake  abroad. 

IMPORTS  EXPORTS 

Barley  (none)  $      27,165.189 

Corn  $     9,296,991  26,543,681 

Cotton  138,743,702  1,136,408,916 

Eggs  617,909  13,569,144 

Meat  and  Dairy  Products  64,274,457  544,074,060 

Oats  6,549,111  12,338,104 

Oat  Meal  &  Rolled  Oats  (none)  3,891,346 

Rice  14,085,728  37,469,175 

Rye  (none)  122,239,537 

Tar,  Pitch  &  Turpentine  (none)  34,503,389 

Tobacco  81,630,011  245,532,069 

Wheat  75,359,220  596,975,396 

Wheat-Flour  3,669,300  224,472,448 

It  was  said  over  and  over  again  by  Mr.  Fordney  and  his  fol- 
lowers that  they  propose  to  protect  and  defend  the  American 
farmer  in  his  Home  Market  and  shield  him  from  the  "dumping" 
of  the  farm  products  of  the  world  into  his  Home  Market.  From 
all  this  we  would  infer  that  the  farmers  of  all  the  rest  of  the 
earth  are  eager  for  the  chance  to  pounce  upon  our  markets  and 
"unload  "their  wheat,  corn,  oats  and  flour  on  us.  In  alarm- 
ing tones  they  tell  us  that  with  the  very  first  opportunity  given, 
the  farmers  of  other  countries  would  so  completely  "flood"  our 
markets  as  to  supply  all  our  wants  in  food  products,  and  in  all 
other  products  now  furnished  us  by  our  own  farmers — thus 
leaving  our  own  farmers  without  a  market! 

Since  1913,  however,  there  has  been  a  very  low  tariff  rate 
even  on  the  "protected"  products  of  the  farm,  under  the  Under- 
wood Tariff;  while  wheat,  flour,  com,  hogs,  cattle,  bacon  and 
ham  have  been  on  the  Free  List — no  tariff  on  them  at  all. 

Here,  then  was  their  opportunity.  For  eight  years  our  ports 
were  wide  open  for  the  farm  products  of  the  world  to  come  in 
and  "flood"  our  markets.  Did  they  come  in?  Did  those 
crushing  and  appalling  things  happen  which  Messrs.  Fordney 
and  McCumber  said  would  happen?  They  did  not.  Suppose 
that  the  thing  they  prophesied  had  actually  happened,  suppose 
that  the  whole  of  the  Canadian  export,  instead  of  going  to  Liver- 
pool, had  been  unloaded  on  the  mills  at  Minneapolis  and  else- 
where, and  ground  into  flour  by  American  labor. 

Would  anything  serious  have  resulted  in  the  price  of  Ameri- 
can wheat?    Nothing  that  any  rational  mind  can  picture. 


The  Farmer  As  an  Exporter  51 

Why?  Because  the  Liverpool  price  is  always  higher  than  our 
own  market  price.  The  more  of  our  wheat  which  Canadian 
wheat  "displaced"  at  Minneapolis,  the  more  wheat  we  could 
have  exported  to  Liverpool,  at  the  higher  price.  Over  there  is 
an  unlimited  demand.  For  instance,  our  combined  exports  of 
wheat  for  1919  and  1920  was  greater  than  the  total  Canadian 
production  of  wheat.  We  exported  in  those  two  years,  507,- 
266,128  bushels.  Canada's  total  production  for  those  two 
years  was  only  456,449,700  bushels.  Our  total  production  for 
those  two  years  was  1,855,703,000  bushels. 

With  that  Liverpool  market  calling  loudly  for  the  excess  pro- 
ductions of  both  countries,  what  does  it  matter  as  to  whether 
Canada  ships  her  wheat  to  Liverpool,  and  so  "displaces"  so 
much  of  our  wheat  there,  or  ships  it  to  Minneapolis,  thus  re- 
leasing so  much  more  of  our  wheat  for  the  Liverpool  market, 
averaging  a  dollar  a  bushel  more  than  is  paid  at  Minneapolis. 

We  must  remember  also  that  the  imports  and  exports  in  1920 
occurred  under  this  same  so-called  "free  trade"  Underwood 
Tariff,  and  before  the  farmers  Emergency  Tariff  was  enacted. 
Furthermore,  since  its  enactment,  no  man  can  furnish  any 
valid  evidence  to  show  that  it  raised  the  general  level  of  the 
price  of  farm  products  one  single  penny. 

The  builders  of  the  Fordney-McCumber  Tariff  Wall  would 
have  us  believe  that  this  is  the  first  time  that  "protection"  has 
been  given  to  the  products  of  the  farm.  The  truth  is,  as  stated  be- 
fore, that  the  protection  of  farm  products  began  as  far  back  as 
1883.  On  wheat  it  put  a  tariff  rate  of  20  cents  a  bushel.  The  Mc- 
Kinley  Tariff  reduced  it  to  15  cents,  the  Cleveland  Tariff  raised  it 
to  20  cents,  the  Dingley  increased  it  to  25  cents,  and  the  Payne- 
Aldrich  Tariff  continued  this  rate. 

The  Underwood  Tariff  put  wheat  and  a  few  other  farm  pro- 
ducts on  the  Free  List.  And  yet  the  excess  of  farm  exports 
over  imports  continued  in  approximately  the  same  proportion 
as  when  they  were  under  High  Tariffs.  Nor  is  that  all.  The 
prices  of  farm  products,  like  the  wages  of  labor,  were  higher 
under  the  Underwood  Revenue  Tariff  than  ever  before  in  our 
history. 

There  can  be  but  one  conclusion,  and  that  conclusion  is  that 
the  American  Farmer,  like  the  American  Laborer,  sells  his  pro- 
duct in  an  Open  Market  and  buys  back  the  necessities  of  life 
in  a  Closed  Market — sells  under  Free  Trade:  buys  under  Pro- 
tection. If  that  would  not  impoverish  and  bankrupt  any  class 
of  people  on  earth,  I  would  like  to  know  what  would. 


Can  the  Farmers  Form  a  Trust?  53 


CHAPTER  XVI. 
Can  the  Farmers  Form  a  Trust? 

In  reply  to  the  undeniable  fact  that  the  American  farmer 
produces  an  excess  of  products  over  the  requirements  of  the 
Home  Market,  and  is  an  exporter,  it  may  be  said  that,  among 
other  manufacturers,  the  United  States  Steel  Corporation  is 
also  an  exporter,  selling  its  product  in  every  country  on  earth. 
Quite  true.  But  this  gigantic  corporation  is  a  Trust.  And 
back  of  it  also  is  a  monopoly  of  the  raw  materials  in  the  earth 
from  which  all  iron  and  steel  are  made.  It  is  the  largest  Indus- 
trial Combine  on  earth,  overshadowing  even  the  Federal  Gov- 
ernment at  Washington.  Hence  it  is  in  position  to  take  full 
advantage  of  a  Tariff  Wall. 

It  is  the  fact  of  its  being  a  Trust  which  enables  it  to  sell  in 
the  Home  Market — to  the  farmers  and  the  rest  of  us — at 
monopolistic  prices,  and  then  to  sell  to  the  people  of  other  nations 
at  the  Open  Market  price — often  at  only  about  half  of  what  is 
charged  here  for  the  same  thing.  Charles  M.  Schwab  once 
admitted  that  when  steel  rails  were  selling  in  this  country  at 
$28  a  ton,  they  were  selling  in  Europe  at  $20  a  ton.  And  the 
same  fact  holds  of  scores  of  "protected"  products.  THEY 
Are  Sold  Cheaper  Abroad  Than  at  Home. 

This  is  the  impregnable  position  of  that  huge  Industrial 
Octopus,  called  Monopoly,  which  our  artist  has  sketched  for 
us  on  the  opposite  page.  The  Tariff  shields  him  from  foreign 
competition,  the  Trust  shields  him  from  home  competition — 
and  his  Monopoly  is  complete. 

But  the  farmers  of  this  country,  whether  for  good  or  ill,  can- 
not form  a  Trust.  They  are  too  numerous.  And  they  are  too 
poor.  The  railroad  and  the  Trust  have  seen  to  that.  THEY 
Compete  With  Each  Other.  This  competition  they  can- 
not prevent.  Manufacturers  and  mine  monopolists  can  pre- 
vent competition  among  themselves  by  forming  Trusts — and 
thus  are  able  to  keep  prices  up  and  take  full  advantage  of  the 
"protection"  given  them. 

So  far  as  a  general  statement  can  be  made  as  to  the  law  deter- 
mining which  Producers  can  be  benefited  by  High  Tariffs  and 
which  cannot,  it  would  seem  to  be  this:   Only  Those  Pro- 


Can  the  Farmers  Form  a  Trust?  55 

DUCERS  OF  Wealth  Who  Are  Able  to  so  Combine 
Their  Interests  As  to  Form  Pools,  Trusts  and  Gen- 
tlemen's Agreements— Thus  Preventing  Competi- 
tion Among  Themselves— Can  Be  Benefited  to 
Any  Appreciable  Extent  By  a  Protective  Tariff. 

Thus  are  Trusts  and  Monopolies  indispensable  to  Producers 
in  order  to  get  the  whole  of  that  increased  cost  of  Home  Goods 
which  the  Tariff  on  Foreign  Goods  makes  possible.  But  the 
farmers  cannot  form  a  Trust  and  so  cannot  be  benefited  to  any 
appreciable  extent — if  at  all — by  High  Tariffs.  But  while 
Protective  Tariffs  cannot  possibly  be  of  any  general  benefit  to 
our  farming  population,  they  can  be,  and  have  been,  the  cause  of 
Tremendous  Detriment  and  Financial  Loss  to  Them. 
Practically  all  economists  are  in  absolute  agreement  on  that 
point. 

They  are  a  detriment  to  the  farmer  in  two  ways:  First,  the 
Tariff  always  has  increased,  and  always  will  increase,  the  cost 
of  the  manufactured  products  he  has  to  buy  far  more  than  it 
will  increase  the  price  of  the  things  he  has  to  sell — even  assuming 
that  it  does  increase  them  at  all.  That  makes  a  continuous 
financial  drain  on  the  farming  population  of  hundreds  of  mill- 
ions annually.  It  has  been  going  on  for  decades  and  genera- 
tions, and  has  taken  its  billions  out  of  the  pockets  of  the  Ameri- 
can farmer. 

Therefore,  when  the  Underwood  Revenue  Tariff  put  wheat, 
wool  and  other  farm  products,  on  the  Free  List,  it  took  abso- 
lutely nothing  from  the  farmer — except  the  delusion  that  he 
was  being  prospered  by  the  very  thing  that  was  plundering  him! 

On  the  other  hand,  when  the  Underwood  Revenue  Tariff  put 
agricultural  machinery,  binder  twine,  cotton  bagging,  oils  and 
scores  of  other  products  on  the  Free  List,  and  cut  in  half  the 
tariff  rates  on  woolen  goods,  cotton  goods,  clothing,  women's  and 
children's  dress  goods,  and  all  the  other  things  the  farmer  must 
buy.  It  Gave  the  Farmer  the  First  Beneficial  Legisla- 
tion He  Has  Had  In  Years. 

There  is  a  second  way  in  which  a  Protective  Tariff  is  a  detri- 
ment to  American  farmers.  No  people,  producing  an  excess 
of  farm  products,  can  export  them,  unless  the  imports  coming 
back  are  largely  the  products  of  the  factory.  That  is,  in  order 
for  them  to  buy  our  farm  products  they  must  be  able  to  sell  us 
the  products  of  their  factories. 

The  illustration  on  the  opposite  page  speaks  volumes  both  to 
the  millions  of  our  farming  population  and  to  the  millions  more 


56  TARIFF  PRIMER 

working  on  salary  and  wages  in  the  towns  and  cities  of  the  na- 
tion. Look  it  over.  Think  it  out  for  yourself.  It  means  low 
wages,  tragic  decline  in  price  of  farm  products,  industrial  stag- 
nation and  bankruptcy.  And  just  to  the  extent  that  the  new 
Tariff  Wall  obstructs  our  trade  with  the  world,  it  will  produce 
these  effects.  In  other  words.  To  THE  EXTENT  THAT  THE 
fordney-mccumber  tariff  keeps  foreign  goods 
Out  It  Will  Keep  Home  Goods  In. 

Therefore,  when  tariff  rates  on  manufactured  products  are  so 
high  as  to  be  prohibitive — which  they  are  on  scores  of  articles 
under  the  Fordney-McCumber  Tariff — and  so  keep  Foreign 
Goods  out,  then  the  hundreds  of  millions  in  Foreign  Lands  can- 
not buy  from  our  farmers;  because  they  cannot  export  their 
own  products  to  pay  for  them — when  a  Tariff  Wall  keeps  them 
out.  This  is  exactly  what  happened  in  1919.  Europe  was  un- 
able to  buy  our  farm  products  even  though  her  millions  were 
starving — because  they  had  nothing  to  give  in  exchange.  The 
result  was  that  our  farmers  had  to  dump  their  enormous  surplus 
into  their  own  home  markets — and  the  bottom  dropped  out. 
We  barely  escaped  the  greatest  industrial  crash  in  our  history. 

It  is  now  proposed  by  means  of  an  artificial  barrier,  known  as 
the  Fordney-McCumber  Tariff,  To  Do  EXACTLY  THE  SAME 
Thing.  They  have  the  goods  to  send  in  but  the  Tariff  Wall 
is  designed  to  keep  them  out.  The  American  farmer  has  yet 
to  realize  the  great  economic  truth  that  THE  SAME  TARIFF 
Wall  Which  Keeps  Foreign  Goods  Out  Keeps  Home 
Goods  In. 

When  at  length  the  light  breaks,  the  American  farmer  will 
feel  the  stir  of  the  Heroic  Spirit  of  '76,  and  will  declare  that 
since  he  cannot  be  benefited  by  a  Tariff  Wall  around  his  pro- 
duct, neither  shall  the  manufacturer  of  the  East  be  further  en- 
riched by  a  Tariff  Wall;  that  since  he  must  sell  his  products  in 
the  Open  Market  of  the  World  in  competition  with  the  products 
of  all  lands  and  nations,  so  likewise  shall  the  American  manu- 
facturer sell  to  him  in  the  Open  Market,  and  in  competition 
with  the  Goods  and  Products  of  all  other  lands  and  nations. 
Then,  and  not  till  then,  will  come  a  new  order  of  things  for  the 
American  Farmer. 


Does  the  hnportation  of  Foreign  Goods,  Etc.  57 


CHAPTER  XVII. 

Does  the  Importation  of  Foreign  Goods  Throw  Our 
Own  Labor  Out  of  Employment? 

That  question  goes  to  the  very  heart  of  the  whole  Tariff  issue. 
Everywhere  there  exists  a  positive  fear  and  dread,  amounting 
to  actual  terror,  at  the  very  thought  of  having  large  quantities 
of  Foreign  Goods  brought  into  the  country.  It  is  a  universal 
fear — a  universal  delusion.  Furthermore,  you  get  exactly  the 
same  reason  for  this  fear  in  China  or  Germany,  Russia  or  Italy, 
France  or  Mexico,  Canada  or  the  United  States.  The  ancient 
fear  of  the  invasion  of  foreign  armies  has  been  transferred  to  the 
fear  and  terror  of  an  "invasion"  of  foreign  goods. 

This  belief  is  based  on  the  supposition  that  there  is  a  direct 
conflict,  a  positive  antagonism,  between  Importing  and  Pro- 
ducing— a  conflict  so  direct  that  when  either  goes  up  the  other 
must  of  necessity  go  down:  the  more  goods  you  produce  in 
your  own  country,  the  less  you  will  import  from  foreign  coun- 
tries— the  more  you  import  from  foreign  countries,  the  less  you 
will  produce  at  home.  In  other  words,  to  the  extent  that  any 
people  import  they  will  not  produce. 

The  basis  of  this  world-wide  superstition  that  the  importation 
of  Foreign  Goods  throws  home  labor  out  of  employment  seems 
perfectly  reasonable,  provided  you  see  only  immediate  results 
and  are  incapable  of  thinking  back  to  see  what  is  necessary, 
absolutely  necessary,  in  order  that  you  can  import  Foreign 
Goods.  Or  if  you  assume  that  we  should  produce  everything 
we  consume— No  MATTER  HOW  GREAT  THE  ECONOMIC 
Loss  IN  Doing  It — then  the  conclusion  will  seem  perfectly 
valid  to  you. 

In  other  words,  it  requires  but  little  intelligence  to  believe 
that  foreign  importations  throw  our  own  labor  out  of  employ- 
ment. But  it  does  require  complex  thinking  to  be  able  to  see 
that  it  does  7wt  throw  home  labor  out  of  employment,  but 
gives  employment  to  home  labor  instead.  And  yet  that  is  the 
conclusion  which  a  high  order  of  intelligence  must  reach. 

The  primary  facts  in  the  case  are  undisputed.  For  example, 
if  you  buy  all  your  shoes  abroad  you  will  not  patronize  our  own 
makers  of  shoes.     If  you  buy  all  your  clothing  abroad — that 


58  TARIFF  PRIMER 

is,  from  foreign  producers — you  will  not  give  employment  to 
the  factory  workers  in  our  own  mills.  In  short,  if  you  buy 
everything  abroad  then  you  will  buy  nothing  at  home.  That 
much  is  certain. 

But  even  if  you  did  all  this,  and  if  every  man,  woman  and 
child  in  America  did  likewise — a  thing  impossible — would  this 
diminish  the  amount  of  wealth  actually  produced  in  this  coun- 
try? Most  certainly  not.  Would  the  buying  abroad  of  abso- 
lutely everything  we  consume  throw  our  own  laborers  out  of  em- 
ployment? Not  a  single  laborer.  On  the  contrary,  if  this 
impossible  thing  were  done  according  to  the  Laws  of  Trade — 
namely,  To  BUY  WHERE  You  Can  Buy  the  Cheapest, 
AND  Sell  Where  You  Can  Sell  the  Dearest— it 
would  increase  both  the  volume  of  our  annual  production 
of  wealth  And  the  Wages  of  American  Labor. 

What,  then,  is  the  source  of  the  delusion  that  the  importation 
of  Foreign  Goods  diminishes  by  so  much  the  production  of 
Home  Goods,  and  so  throws  labor  out  of  employment?  It 
arises,  primarily,  from  the  use  of  the  word  "buy".  There  is  no 
such  thing  as  buying.  We  do  not  "buy"  Foreign  Goods.  We 
trade  for  them.  Foreign  peoples  do  not  "buy"  from  us.  They 
trade  with  us — exchanging  goods  for  goods.  They  can  get  our 
goods  in  no  other  way.  And  the  only  possible  way  that  we  can 
get  their  goods  is  to  trade  our  goods  for  them. 

In  fact,  there  really  is  no  such  thing  as  Buying  and  Sell- 
ing even  among  ourselves.  In  the  ultimate  analysis,  what 
takes  place  is  not  buying  but  trading.  Always  and  every- 
where what  we  call  buying  and  selling,  consists  in  the  exchange 
of  service  for  service.  Money  merely  facilitates  the  exchange 
of  these  services.  But  trade  does  not  eliminate  production 
among  ourselves.  We  still  must  produce  something,  or  render 
some  service,  to  exchange  for  the  money  with  which  we 
"buy."  And  the  same  principle  holds  of  our  consumption 
of  Foreign  Goods.  And  yet  the  old  delusion  continues  and  is 
the  basis  of  the  whole  superstition  of  Protection. 

For  example.  Congressman  Gernard  of  Pennsylvania,  speak- 
ing in  the  House,  July  14, 1921,  said:  "We  dare  not  be  deceived 
with  the  thought  that  America  can  open  wide  her  gates  to  the 
markets  of  the  world  without  destroying  and  endangering  her 
own  industrial  health."  Congressman  Graham  of  Illinois,  later, 
said :  "Imports  were  flooding  in  to  us  from  across  the  seas,  TAK- 
ING the  Place  of  the  manufactured  articles  which  hereto- 
fore our  higher  salaried  American  workmen  had  been  making." 


Does  the  Importation  of  Foreign  Goods,  Etc.  59 

Senator  Smoot  of  Utah  gave  one  of  the  clearest  statements 
of  this  colossal  superstition,  this  gigantic  delusion,  that  I  have 
ever  seen.  On  May  20,  1914,  he  said:  "Every  dollar  of  im- 
portation Takes  the  Place  of  a  dollar's  worth  of  goods 
manufactured  in  this  country." 

Now  let  us  face  the  facts.  Is  it  true  that  importations  take 
the  place  of  production  at  home?  Is  it  true  that  the  one  is  a 
substitute  for  the  other? 

Members  of  Congress  never  tire  in  talking  about  what  they 
call  the  "free  trade"  Cleveland  Tariff,  and  the  awful  flood  of 
Foreign  Goods  that  was  dumped  on  our  shores.  But  I  find  that 
under  the  McKinley  Tariff,  1892,  '93,  '94— we  imported  $72,- 
372,955  more  goods  than  we  did  in  the  three  years  under  the 
Cleveland  Tariff— 1895,  '96,  '97.  Now  if  the  foreign  impor- 
tation of  goods  throws  American  laborers  out  of  employ- 
ment, the  Cleveland  Low  Tariff  did  far  less  damage  than  the 
McKinley  High  Tariff. 

Looking  further  I  find  that  under  the  Cleveland  Tariff  we 
imported  $16,000,000  worth  of  iron  and  steel,  while  under  the 
McKinley  Tariff,  for  the  same  length  of  time,  we  imported 
$53,000,000  worth.  Under  the  Dingley  Tariff  we  imported 
$12,191,198,006  worth  of  foreign  goods.  Under  the  four  years 
of  the  Payne-Aldrich  Tariff  we  imported  $6,550,446,703  worth 
of  foreign  goods. 

Taking  the  Protectionist  theory  that  "foreign  importations 
throw  American  labor  out  of  employment",  how  can  they 
justify  these  huge  importations  under  high  tariffs.  Or  do  they 
claim  that  importations  of  foreign  goods  throw  labor  out  of 
employment  only  when  it  comes  in  under  a  Democratic  Tariff? 
If  their  theory  is  true,  then  we  should  not  have  Tariff  Walls 
but  an  absolute  embargo.  But  is  it  true,  or  is  it  absolutely 
false? 

Now  that  we  have  started  to  reason  on  the  subject,  let  us 
follow  ir  through  to  the  end.  Does  the  importation  of  Foreign 
Goods  throw  our  own  labor  out  of  employment?  The  answer 
to  that  question  is  this:  it  does  provided  we  can  import  without 
exporting.  If,  on  the  other  hand,  we  must  export  to  the  full 
amount  of  our  imports — dollar  for  dollar — then  the  proposition 
is  utterly  false.  It  is  not  a  rational  theory  but  a  delusion,  a 
gigantic  superstition.  No  superstition  of  the  Dark  Ages  could 
have  been  more  irrational,  crude  or  ignorant. 


Can  We  Import  Without  Exporting?  61 


CHAPTER  XVIII. 
Can  We  Import  Without  Exporting? 

Our  artist,  rising  to  a  sublime  vision  of  International  Trade — 
encompassing  the  whole  earth  in  his  imagination — has  endeav- 
ored to  picture  to  our  minds  the  far-reaching  arms  of  the  scales 
which  Equity  holds  over  sea  and  land;  balancing  with  perfect 
poise  the  exchange  of  equivalences  between  man  and  man,  be- 
tween nation  and  nation,  in  the  vast  and  complex  Commerce 
of  the  world. 

Merely  to  ask  this  question — can  we  import  without  export- 
ing— is  also  to  answer  it.  Every  child  in  the  Grammar  Grade 
at  school  knows  that  Trade  consists,  not  of  one  thing  but  of  two 
things:  Imports  and  Exports.  It  knows  also  that  each  calls 
for  the  other,  that  every  dollar's  worth  of  imports  requires  a 
dollar's  worth  of  exports;  therefore,  that  to  the  extent  that  any 
people  import,  they  must  also  export. 

No  matter  whether  we  consume  Home  Goods  or  Foreign 
Goods,  we  cannot  escape  the  necessity  for  production.  All 
who  consume  must  produce  the  equivalent  in  value  of  what  they 
consume — or  live  by  charity  or  theft.  And  production  of 
wealth  is  impossible  icithout  the  employment  of  labor. 

How  can  a  people  import  without  exporting?  How  can  they 
export  without  producing  something  to  export?  And  how  can 
they  produce  something  to  export  without  employing  labor? 
To  these  questions  there  can  be  but  one  answer.  Therefore, 
the  importation  of  Foreign  Goods  does  not  throw  home  labor 
out  of  employment.  On  the  contrary,  importing  gives  employ- 
ment to  labor.  It  may  change  the  direction  of  that  employ- 
ment, but  it  cannot  change  the  amount  of  that  employment — 
except  to  increase  it. 

Take  the  case  of  the  laborer.  Can  he  import  without  export- 
ing? Can  he  get  the  necessities  of  life  without  giving  their 
equivalent  in  wealth  or  service?  Take  the  case  of  the  farmer. 
Can  the  farmer  import  goods,  clothing,  machinery,  hardware, 
household  utensils,  etc.,  without  exporting  the  products  of  the 
farm  with  which  to  pay  for  them?  If  so,  how  can  it  be  done? 
And  must  not  his  exports  equal  his  imports — unless  he  goes  in 
debt?    And  even  if  he  go  in  debt,  he  will  some  time  have  to 


62  TARIFF  PRIMER 

export  the  equivalent  of  the  debt — which  is  simply  the  full 
equivalent  of  the  imports. 

Furthermore,  how  can  he  have  exports — how  can  he  have 
wheat,  corn,  oats,  potatoes,  cotton,  etc. — to  give  in  exchange 
for  these  imports  unless  he  produces  them?  And  how  can  he 
produce  them  without  employing  labor — either  his  own  labor 
or  the  labor  of  others? 

Someone  may  answer:  "He  need  not  produce  these  home 
products  in  order  to  get  the  things  he  desires.  If  he  has  the  money 
he  can  buy  them."  Quite  true.  But  how  can  he  get  the  money 
unless  he  produces  something  to  be  traded  for  it?  And  so  there 
is  no  escape  from  the  necessity  of  having  to  produce  commodi- 
ties to  be  exported  equal  in  value  to  the  imports  obtained. 

Every  nation  must  be  self-supporting — or  live  by  theft. 
Every  state,  every  county,  every  community  must  be  self-sup- 
porting, must  produce  the  equivalent  of  what  it  consumes.  In 
fact,  every  individual  must  be  self-supporting,  must  produce 
the  equivalent  of  what  he  himself  consumes — unless  he  live  by 
charity  or  theft. 

For  example,  we  must  consume  enormous  quantities  of  wheat, 
oats,  corn,  cotton  and  potatoes  in  this  country.  We  must  do 
this — or  starve.  And  in  order  to  get  them  we  must  either  pro- 
duce them  directly  for  ourselves,  or  else  produce  something  else 
and  trade  for  them.  But  it  is  not  correct  to  say,  as  all  Protec- 
tionists do  say,  that  we  can  get  them  either  by  Production  or 
Trade.  We  must  produce  in  order  to  trade.  Nor  is  it  correct 
to  say  that  we  can  get  them  either  by  Industry  or  by  Purchase, 
that  we  can  either  produce  or  buy.  We  must  produce  some- 
thing to  sell  in  order  to  get  the  money  with  which  to  buy. 

No  matter  how  abundantly  the  other  nations  of  the  earth 
produce  the  necessities  of  life,  they  will  not  be  generous  enough 
to  donate  them  to  us — except  in  case  of  famine.  For  every 
dollar's  worth  they  ship  to  us  they  demand  a  dollar's  worth  of 
our  products  in  return.  The  moment  we  stop  producing  for 
them,  they  will  stop  producing  for  us.  How  irrational,  then, 
these  wild  alarms.  They  are  infantile — the  product  of  a  crude, 
narrow  and  undeveloped  brain.  They  are  the  result  of  an 
utter  incapacity  to  comprehend  even  the  most  elementary  re- 
quirements of  Trade,  BECAUSE  TRADE  Means  Always  the 
Exchange  of  Equivalences. 

In  the  absence  of  debt,  the  Law  of  Trade  is  this:  EVERY 
Dollar's  Worth  of  Imports  Requires  a  Dollar's 
Worth  of  Exports.     When  debt  exists  between  two  indi- 


Can  We  Im'port  Without  Exporting?  63 

viduals,  or  between  the  people  of  two  nations,  then  we  have  a 
wholly  different  situation.  Then  the  law  is  this:  the  debtor 
will  always  export  more  than  he  imports — the  creditor  will 
always  import  more  than  he  exports. 

To  show  that  this  is  true  beyond  all  reasonable  doubt,  let  us 
review  the  cases  cited  from  our  history,  and  show  that  no  matter 
how  great  the  volume  of  importations  they  had  to  be  met  with 
a  volume  of  exports  equally  great.  In  fact,  they  were  met  with 
a  volume  of  exports  vastly  greater — because  Up  TO  1916  WE 
Were  a  Debtor  Nation.  For  instance,  while  foreign  labor 
was  producing  for  us  $2,276,425,051  worth  of  goods  imported 
under  the  Cleveland  Tariff,  American  labor  was  producing  for 
them  goods  to  the  amount  of  $2,741,138,659.  Take  the  case 
under  the  McKinley  Tariff.  While  we  were  "buying"  from 
foreign  nations  goods  to  the  amount  of  $2,348,798,006,  they 
were  "buying"  from  us  a  still  larger  bill  of  goods,  amounting  to 
$2,770,083,914. 

Under  the  Dingley  Tariff,  as  shown  before,  we  imported  $12,- 
191,198,006  worth  of  Foreign  Goods.  Did  this  diminish  the 
amount  of  our  domestic  production,  or  throw  our  labor  out 
of  employment?  It  did  not.  And  it  did  not  for  the  reason 
that  while  we  imported  only  that  amount  of  foreign  products, 
the  people  of  foreign  lands  imported  our  products  to  the  amount 
of  $18,270,503,750! 

It  is  true  that  we  imported  $6,550,445,703  worth  of  goods 
under  the  Payne-Aldrich  Tariff.  But  we  exported  in  return 
goods  to  the  amount  of  $8,464,511,477.  Protectionist  speakers 
all  over  the  country  will  point  to  the  fact  that  under  what  they 
will  call  the  "free  trade"  Underwood  Tariff,  there  was  dumped 
into  our  markets  goods  to  the  amount  of  $22,039,044,693!  And 
these  figures  will  strike  terror  into  the  hearts  of  their  hearers! 
They  will  probably  not  couple  with  this  fact  the  corresponding 
fact,  which  is  that  while  foreign  labor  was  filling  our  orders  for 
goods  to  this  amount,  we  were  filling  orders  for  them  aggregat- 
ing to  the  colossal  sum  of  $40,999,714,370! 

Therefore,  all  the  facts  and  figures  in  the  case  show  that  the 
importation  of  foreign  goods — no  matter  how  great  the  amount 
— instead  of  throwing  labor  out  of  employment,  gives  employ- 
ment to  labor.  And  this  for  the  reason  that  always,  and  every- 
where, Imports  Must  Be  Met  By  Exports,  Dollar 
For  Dollar.  And  what  is  true  of  our  country  is  true  of  every 
other  country  on  earth. 


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Our  "Favorable"  Balance  of  Trade  65 


CHAPTER  XIX. 
Our  "Favorable"  Balance  of  Trade 

On  the  opposite  page  our  artist  has  pictured  Uncle  Sam  con- 
fronted with  a  great  problem.  In  looking  over  his  books  our 
Uncle  Sam  has  discovered  that  he  has  been  shipping  out  far 
more  goods  than  he  ever  gets  any  imports  for  in  return.  He 
fears  that  he  has  been  over-doing  it.  And  so  the  question  in 
his  mind  is  as  to  whether  it  is  a  gain  or  a  loss  to  send  to  foreign 
countries  hundreds  of  millions  of  dollars'  worth  of  commodities 
for  which  he  gets  absolutely  no  commodities  in  return.  That 
is  Exporting  Without  Importing. 

Uncle  Sam  has  been  told,  just  as  we  have  been  told,  that  the 
more  goods  you  send  out  and  the  less  goods  you  get  back  in  re- 
turn, the  better  you  are  off.  From  McKinley  to  Fordney  and 
McCumber,  he  has  been  told  that  this  excess  in  the  exportation 
of  merchandise  is  one  of  the  many  "blessings"  which  only  a 
Protective  Tariff  can  give.  Furthermore,  that  the  excess  in 
the  exports  of  merchandise  over  imports  is  made  up  BY  HUGE 
Importations  of  Gold! 

The  Protectionist  brain  has  taken  special  delight  in  the  fact 
that  we  ship  out  hundreds  of  millions  of  dollars'  worth  more 
than  we  get  back.  I  presume  if  we  got  absolutely  no  imports 
in  return  for  our  exports,  men  of  the  mental  type  of  Fordney, 
McCumber  and  their  followers,  would  be  happier  still.  Fur- 
thermore, they  think  it  the  direct  result,  the  necessary  effect, 
of  a  Protective  Tariff.  McKinley  used  to  "point  with  pride" 
— instead  of  regret — to  the  excess  of  our  exports  over  our  im- 
ports. Then  he  would  exclaim:  "IT  WILL  ALL  COME  BACK 
In  Shining  Gold." 

But  this  is  not  true.  WE  HAVE  ACTUALLY  EXPORTED 
More  Gold  and  Silver  Than  We  Ever  Got  Back. 
When  he  turned  to  the  official  reports.  Uncle  Sam  discovered 
that  from  1790  to  1915,  he  had  exported  merchandise  to  the 
amount  of  $58,820,315,030.  Looking  on  the  other  side  of  the 
ledger,  he  finds  that  he  got  back  in  return  merchandise  amount- 
ing to  $49,999,482,199.  That  left  a  balance  of  $8,820,832,831 
which  the  people  of  the  rest  of  the  world  were  owing  him  for  the 
goods  he  had  shipped  them. 


Our  "Favorable"  Balance  of  Trade  67 

But  when  our  Uncle  Sam  turned  to  see  if  the  excess  in  the 
importation  of  bullion  was  enough  to  make  good  this  balance, 
he  got  the  shock  of  his  life.  To  his  amazement  he  discovered 
that  he  had  actually  exported  more  gold  and  silver  than  he  ever 
got  back. 

Looking  at  the  figures  closely  he  found  that  there  had  come 
back  in  payment  for  these  goods,  which  were  duly  and  properly 
delivered  and  accepted  by  the  people  of  foreign  lands,  only 
$3,689,895,451.  On  the  other  hand,  when  he  turned  to  see  how 
much  gold  and  silver  he  had  exported,  in  addition  to  the  huge 
volume  of  products  he  had  sent  out,  he  found  that  his  exports 
of  bullion  amounted  to  $5,368,790,625.  This  was  the  astound- 
ing thing.  He  had  actually  sent  out  $1,678,695,174  more  of 
gold  and  silver  than  ever  came  back;  leaving  a  grand  total  in  the 
excess  of  exports  over  imports  of  $10,499,728,005,  for  which 
absolutely  nothing  came  back — but  receipted  bills. 

Thus  did  Uncle  Sam  discover,  as  we  have  now  discovered, 
that  this  excess  of  exports  over  imports  does  not  "come  back  in 
shining  gold."  In  fact,  that  it  DOES  NOT  COME  BACK  AT 
All.  These  vast  volumes  of  exports  go,  not  to  get  the  equi- 
valent imports  in  return,  but  to  pay  Interest,  Dividends  and 
Rent.  They  are  really  no  part  of  commerce.  They  bring 
nothing  in  return.  They  are  not  an  exchange.  They  stand 
more  in  the  light  of  Tribute.  Much  of  them  goes  across  the 
ocean  to  pay  the  royal  families  of  Europe  and  other  large  land 
holders,    FOR   OUR   PRIVILEGE    OF   LIVING   ON   AMERICAN 

Soil. 

In  the  cartoon  on  the  opposite  page  we  have  a  vivid  por- 
trayal of  absurd  idea  that  a  people  are  enriched  by  exporting. 
With  this  goes  the  delusion  that  a  people  are  injured  and  im- 
poverished by  importing.  Here  we  see  the  necessities  of  life, 
the  raw  materials  of  food  and  clothing,  being  loaded  on  the 
great  ship  to  be  sent  to  the  people  of  foreign  lands. 
^  But  in  the  background  our  artist  shows  us  in  a  sort  of  "double 
exposure" — as  they  say  in  motion  pictures — showing  poverty 
and  want  gazing  at  the  spectacle  of  seeing  the  things  they  need 
going  to  foreign  lands.  And  yet  this  in  itself  is  supposed  to  be 
beneficial.  Whereas,  Protectionists  would  have  us  believe  that 
if  that  ship  were  bringing  in  and  unloading,  instead  of  carrying 
away,  the  things  of  which  millions  of  our  people  are  in  need, 
it  should  be  regarded  as  an  evil,  and  even  disastrous,  if  too  long 
continued.  The  cartoon  is  a  portrayal  of  Exporting  without 
Importing.    And  that  process,  whether  applied  to  an  indi- 


68  TARIFF  PRIMER 

vidual,    a  family,    or  a   nation — means   impoverishment   in 
the  end. 

Congressman  Fess,  of  Ohio,  now  candidate  for  United  States 
Senator,  in  the  spring  of  1914,  claimed  that  the  Underwood 
Tariff  had  been  a  loss  to  the  country  of  a  quarter  of  a  billion  of 
dollars.  He  made  up  the  loss  by  adding  together  the  goods  we 
did  not  export— that  was  a  total  loss — -and  the  goods  which 
we  imported.  That  was  also  a  total  loss — to  us!  Can  stupidity 
and  economic  nonsense  go  beyond  that? 

Some  one  has  well  said  that  if  a  people  are  impoverished  by 
importing,  but  are  enriched  by  exporting,  then  if  all  the  ships 
that  started  from  all  the  ports  of  the  world  loaded  with  the  ne- 
cessities of  life  were  to  go  down  in  mid-ocean,  what  a  blessing 
it  would  be  to  mankind! 

Henry  George,  one  of  the  greatest  thinkers  the  economic  world 
has  produced,  said:  "Commerce  is  not  always  the  realization 
of  an  exchange,  but  more  often  THE  EXACTION  OF  A  TRIBUTE. 
When  Rome  was  mistress  of  the  world,  Sicily,  Spain,  Africa, 
Egypt  and  Britain  exported  to  Italy  far  more  than  they  im- 
ported from  Italy.  But  so  far  as  this  excess  of  their  exports 
over  their  imports  indicating  their  enrichment,  it  indicated 
their  impoverishment.  It  meant  that  the  wealth  produced  in 
the  provinces  was  being  drained  to  Rome  in  taxes  and  tribute 
and  rent,  for  which  no  return  was  made. 

"The  tribute  exacted  by  Germany  from  France  in  1872 
caused  a  large  excess  of  French  exports  over  imports.  So  the 
foreign  debt  which  has  been  fastened  upon  Egypt  requires 
large  amounts  of  the  produce  of  that  country  to  be  sent  away 
for  which  there  is  no  return  in  imports.  All  war  indemnities 
give  rise  to  a  movement  in  trade  which  manifests  itself  on  the 
side  of  the  conquered  in  exports  alone,  and  on  the  side  of  the 
conquerors  in  imports— FOLLOWED  BY  NO  RETURN. 

"If  not  true  already,  it  will  not  be  many  years  before  the 
English  aristocracy  [and  royal  family]  will  draw  far  larger  in- 
comes from  their  American  estates  than  from  their  home  estates 
— incomes  to  supply  which  we  must  export  without  any  return 
in  imports." 

The  same  process  of  exporting  without  importing,  is  going 
on  all  about  us.  The  farmer  who  must  pay  interest  on  debt  is 
constantly  exporting  more  than  he  imports.  The  tenant  is 
constantly  exporting  from  the  land  on  which  he  toils  more  than 
he  imports.  But  he  does  not  regard  this  fact  as  "favorable" — 
at  least  to  him.     So,  likewise,  the  farmers  and  fruit  growers^ 


Our  "Favorable"  Balance  of  Trade  69 

lumbermen  and  miners,  and  all  other  people  of  the  West,  are 
constantly  exporting  towards  the  East — where  the  capitalists 
who  hold  their  notes  and  mortgages  reside — vastly  more  than 
they  import  from  the  East. 

One  of  the  objects  of  the  Fordney-McCumber  Tariff,  by  in- 
creasing the  price  of  manufactured  products  more  than  it  can 
possibly  increase  the  price  of  farm  products,  is  to  still  more  in- 
crease this  drain  of  the  wealth  of  the  West  towards  the  East — 
Exporting  Without  Importing. 

Owing  to  our  tremendous  exportations  since  1915  our  whole 
situation  has  been  changed.  We  are  now  A  CREDITOR  NA- 
TION. From  1915  to  1920,  inclusive,  our  total  excess  of  both 
merchandise  and  bullion  exported  over  our  imports  of  merchan- 
dise and  bullion  was  $18,104,016,451!  THIS  Is  A  FINANCIAL 
AND  Industrial  Achievement  Without  A  Parallel 
IN  THE  History  of  the  World.  It  changed  us  from  a 
debtor  to  a  creditor  nation.  From  this  point  on,  if  the  peoples 
of  Europe  pay  their  debts,  OUR  IMPORTS  WILL  EXCEED 
Our  Exports. 

But  our  exports  still  exceed  our  imports.  That  means  that 
Europe  Is  Still  Going  in  Debt  to  Us.  In  the  present 
industrial  condition  of  Europe,  it  may  be  years  to  come  before 
she  can  reverse  her  position  and  pay  her  debts.  But  when  that 
time  does  come,  no  matter  when,  instead  of  exporting  more 
than  we  import — whether  we  have  Protective  Tariffs,  Revenue 
Tariffs,  or  absolute  Free  Trade — our  imports  will  exceed  our 
exports. 

Thus  have  we  shown  that  the  seeming  exception  to  the  rule 
that  imports  and  exports  are  equal,  is  in  no  wise  due,  either  to 
High  Tariffs  or  to  Low  Tariffs,  but  to  the  great  fact  of  Debt — 
the  fact  of  Dividends,  Interest  and  Rent.  Amidst  it  all  every 
dollar's  worth  of  imports  called  for  a  dollar's  worth  of  exports 
— no  more,  and  no  less.  The  rest  went  to  pay  debts,  AND 
Would  Have  Been  Exported  if  There  Had  Been  No 
Imports  Whatsoever. 


My  Two  Islands  71 


CHAPTER  XX. 
My  Two  Islands 

Now  that  we  are  nearing  the  last  chapter,  let  us  get  all  the 
threads  of  thought  woven  into  the  warp  and  woof  of  one  de- 
cisive and  comprehensive  Conclusion.  And  this  can  be  done 
by  answering  one  specific  question:  Is  TRADE  INJURIOUS, 
OR  Is  It  Beneficial? 

That  is,  in  brief,  the  whole  issue  between  Protection  and 
Trade.  Both  cannot  be  right.  One  or  the  other  is  wrong. 
Which  is  it?  If  Protection  be  a  good  thing,  then  is  Trade  a  bad 
thing:  because  Protection  exists  only  for  the  prevention  of 
Trade.  Ought  Trade  to  be  abolished?  It  ought,  if  it  be  a  bad 
thing.  Ought  Protection  to  be  abolished?  It  ought,  if  Trade 
be  a  good  thing. 

And  so  we  cannot  decide  upon  the  merits  of  a  Protective 
Tariff  until  we  decide  upon  the  merits  of  this  thing  which  a 
Protective  Tariff  is  designed  to  prevent — namely,  Trade,  Com- 
merce, Exchange.  That  is  the  issue,  and  the  only  issue.  I 
know  it  has  not  been  put  in  this  form,  but  that  is  the  verdict 
which  a  profound  and  final  analysis  must  give. 

What  is  Trade?  Why  does  it  exist?  What  causes  it?  Cen- 
turies and  centuries  ago,  way  back  in  the  dim  dawn  of  Civiliza- 
tion, mankind  discovered  that  by  trading  and  exchanging 
goods  with  each  other,  THEY  MULTIPLIED  THE  PRODUCT- 
IVENESS OF  Their  Own  Labor.  They  saw  that  Trade  could 
be  made  a  mighty  agency  in  the  creation  of  wealth.  NO 
Other  Economic  Discovery  the  Human  Mind  Has 
Ever  Made  Can  Possibly  Compare  to  the  Discovery 
and  Development  of  Trade. 

And  for  the  reason  that  all  other  discoveries — even  Civiliza- 
tion itself — depend  upon  the  fact  of  Trade.  Without  Trade 
and  Commerce  no  ship  would  float  the  sea,  no  railroad  could 
exist,  inventions  would  be  unknown.  They  all  depend  upon 
Trade,  Barter,  Exchange — Commerce. 

Abolish  Trade  and  mankind  would  go  back  to  barbarism  and 
might.  The  larger  part  of  the  human  race  would  perish.  The 
present  population  of  the  globe  would  be  utterly  impossible 
without  Commerce.     Why?     Because  there  cannot  be  differ- 


72  TARIFF  PRIMER 

entiation  of  employments,  there  cannot  be  "division  of  labor," 
without  Trade.  Division  of  Labor  always  implies  and  necessi- 
tates an  exchange  either  of  goods  or  service.  Without  Division 
of  Labor,  Civilization  is  impossible.  But  without  Trade  there 
can  be  no  Division  of  Labor. 

Each  human  being  must  have  Food,  Clothing  and  Shelter. 
He  must  have  these  things — or  perish.  They  can  be  obtained 
only  by  labor.  They  do  not  exist  free.  They  must  be  pro- 
duced. In  a  just  state  of  society  each  human  being  must  either 
produce  them  directly  for  himself,  or  produce  something  else 
and  trade  for  them. 

To  illustrate  the  Law  of  Trade  our  artist  has  pictured  for  us 
two  islands  located  quite  near  each  other.  One  we  will  call 
"Coal  Island".  The  average  returns  of  labor  expended  in 
digging  coal  are  a  ton  a  day — six  tons  a  week.  The  other  we 
will  call  "Wheat  Island",  because  its  soil  is  favorable  to  the 
production  of  wheat.  On  the  average,  it  yields  a  bushel  of 
wheat  a  day  to  labor — six  bushels  a  week.  But  it  is  unfavor- 
able for  the  production  of  coal.  While  it  has  mines,  yet  the 
veins  are  so  thin  that  it  takes  a  week's  labor  to  produce  a  single 
ton  of  coal. 

But  on  Coal  Island,  were  they  to  engage  in  the  growing  of 
wheat,  their  wages  would  be  just  the  reverse  of  those  on  Wheat 
Island.  Since  it  would  take  a  week's  labor,  on  the  average,  to 
grow  a  bushel  of  wheat,  the  wages  for  labor  would  be  only  one 
bushel  of  wheat  a  week. 

Nor  is  this  difference  due  in  any  degree  to  the  productiveness 
of  the  laborers  themselves.  IT  Is  DUE  TO  THE  DIFFERENCE 
IN  THE  Productiveness  of  Land  in  Reference  to 
These  Two  Products.  The  same  amount  of  labor  which 
will  produce  one  bushel  of  wheat  on  Coal  Island,  will  produce 
six  bushels  on  Wheat  Island.  And  the  same  in  reference 
to  coal. 

Let  us  now  introduce  Trade,  Commerce,  between  the  two 
islands  and  see  the  manifold  blessings  that  will  come  to  the 
people  of  each  island.  The  people  on  the  Wheat  Island  must 
have  coal  as  well  as  wheat.  If,  instead  of  producing  coal  for 
themselves,  they  produced  wheat  and  traded  it  to  their  neigh- 
bors for  coal,  The  Productiveness  of  their  Labor 
Would  Be  Increased  Six  Fold.  In  other  words,  by  the 
mere  fact  of  Trade  the  normal,  natural  wages  of  their  labor  will 
be  increased  500% — measured  in  terms  of  coal.  They  now 
have  six  tons  of  coal  as  the  result  of  their  labor,  instead  of  one. 


My  Two  Islands  73 

How  stands  the  case  with  the  people  on  Coal  Island?  They 
must  have  wheat  as  well  as  coal  in  order  to  live.  If,  instead  of 
producing  wheat  directly  for  themselves,  they  produce  coal 
and  trade  it  for  wheat,  they  will  have  six  bushels  of  wheat  in- 
stead of  one  as  the  result  of  their  labor.  And  so  Trade  has  also 
increased  their  wages  500% — measured  in  terms  of  wheat. 
And  these  are  the  results,  in  principle,  which  follow  from  Trade 
everywhere,  in  all  countries,  under  all  forms  of  government. 

Thus  do  we  see  that  Trade  is  in  itself  A  PRODUCER  OF 
Wealth.  This  fact  mankind  discovered  centuries  ago. 
Furthermore,  we  see  how  Trade  makes  each  country  a  composite 
of  all  lands  and  climes;  so  that — barring  the  cost  of  transporta- 
tion— the  result  is  the  same  as  if  each  island  produced  equally 
well  both  wheat  and  coal. 

We  see  also  that  Trade  does  not  enable  the  people  to  live 
from  the  labor  of  others,  but  that  EACH  PRODUCES  THE 
EQUIVALENT  OF  ALL  THAT  IT  CONSUMES.  It  is  the  labor 
of  the  men  in  the  wheat  fields  of  Wheat  Island  that  produce  the 
coal  which  they  consume.  How  do  they  do  this?  By  devoting 
themselves  exclusively  to  the  production  of  wheat — thus  pro- 
ducing an  excess  beyond  their  own  needs — they  make  it  possible 
for  the  people  on  Coal  Island  to  devote  themselves  exclusively 
to  the  production  of  coal.  And  the  people  on  Coal  Island  as 
certainly  produced  the  wheat  on  Wheat  Island  which  they  con- 
sume, as  tho  they  went  over  there  and  sowed  the  seed  and  reaped 
the  harvest  for  themselves. 

Now  suppose  the  owners  of  the  coal  land  on  Wheat  Island 
should  come  before  their  Congress  and  say:  "Why  should  we 
'buy'  our  coal?  Why  not  produce  it  for  ourselves?  Let  us 
start  a  new  industry,  keep  this  money  at  home,  and  give  em- 
ployment to  our  own  labor  by  producing  our  coal  instead  of 
buying  it.  Why  give  employment  to  the  laborers  on  Coal 
Island  by  having  them  produce  all  our  coal  for  us?  Why  put 
ourselves  at  the  mercy  of  these  'foreigners'?  Give  us  a  Tariff 
high  enough,  say  600%,  and  we  will  start  a  new  industry  on  this 
island."     (Gentle  reader,  is  not  this  a  familiar  argument?) 

And  so  they  build  a  High  Tariff  Wall  around  Wheat  Island 
for  the  "protection"  of  Producers  of  coal.  At  the  end  of  the 
year,  it  is  true,  the  owners  of  the  coal  lands  on  Wheat  Island 
can  "point  with  pride"  to  a  new  industry.  No  question  about 
that.  There  it  stands.  The  island  now  produces  its  coal  in- 
stead of  buying  it.  But  what  is  the  result?  What  effect  upon 
the  total  wealth  of  the  island? 


74  TARIFF  PRIMER 

This  appalling  result:  Measured  in  terms  of  coal,  they  have 
only  one-sixth  as  much  wealth  as  they  would  have  had  by  produc- 
ing wheat  and  trading  for  coal.  In  other  words,  the  natural  wages 
of  labor  is  only  one-sixth  under  a  protective  Tariff  of  what  it 
was  under  the  former  Free  Trade.  Has  labor  been  given  more 
employment  than  before?  Not  at  all.  It  has  simply  been 
diverted,  diverted  from  the  most  productive  channels  of  employ- 
ment into  the  least  productive  channels.  And  by  so  doing  it 
has  not  increased  the  amount  of  its  employment.  But  it  has 
diminished  its  wages  to  one-sixth  of  what  they  were  before! 

Apply  the  same  principle  to  Coal  Island  and  the  same  result 
follows.  The  labor  which  was  formerly  engaged  in  the  pro- 
duction of  coal  is  now  employed  in  the  production  of  wheat. 
True  it  is  they  are  now  producing  their  wheat  instead  of  buying 
it— but  at  a  TREMENDOUS  Economic  Loss.  The  rewards 
of  labor  are  only  a  sixth  of  what  they  were  under  the  former 
Free  Trade.  Furthermore,  at  the  end  of  the  year  the  total 
wealth  of  the  island  is  only  one-sixth  of  what  it  would  have  been 
had  the  people  produced  coal — the  thing  they  can  produce  to  the 
best  advantage — and  traded  coal  for  the  other  necessity  of  life 
which  the  people  on  Wheat  Island  can  produce  to  the  best  ad- 
vantage. 

This  simple  illustration  enables  us  to  see  the  full  working  of 
the  principle  of  Trade.  And  to  this  law  there  is  no  exception. 
There  can  be  none.  It  is  as  universal  as  the  law  of  gravitation. 
Substitute  continents  for  islands.  Substitute  hundreds  of 
products  for  only  two  products,  and  the  result  is  still  the  same. 

Here  again,  we  see  the  great  economic  truth,  the  truth  that 
there  are  two  ways  by  which  the  people  of  any  country  can 
obtain  the  necessities  of  life.  One  way  is  to  produce  them  di- 
rectly for  themselves.  The  other  way  is  to  produce  something 
else  and  trade  for  them.  If  left  free,  the  people  will  take  which- 
ever course  gives  them  THE  GREATEST  RESULTS  FOR  THE 

Least  Amount  of  Labor. 

The  principles  governing  Trade  between  the  people  of  differ- 
ent nations  are  identical  with  the  principles  governing  trade  be- 
tween the  people  of  the  same  community.  The  motive  is  the 
same  in  both,  the  cause  is  the  same  in  both.  And  the  results 
are  the  same  in  both.  ALL  ECONOMISTS  ARE  AGREED  ON 
That  Point. 

If  buying  the  necessities  of  life  instead  of  producing  them 
direct,  throws  labor  out  of  employment  in  the  nation,  it  will 
throw  labor  out  of  employment  in  each  family.     If  the  money 


My  Two  Islands  75 

which  goes  out  beyond  our  borders  for  goods — a  thing  which  in 
reality  never  happened,  because  trade  is  the  exchange  of  goods 
for  goods  and  not  of  goods  for  money — then  the  money  paid  out 
by  each  family  for  the  necessities  of  life  would  be  a  positive  loss. 

There  was  a  time  back  in  the  Pioneer  Days  when  each  house- 
hold produced  practically  everything  that  it  consumed.  It  was 
a  complete  economic  unit  in  itself.  Each  family  not  only  grew 
its  own  wool,  but  carded  it,  spun  it  into  yarn,  wove  the  yarn 
into  cloth,  and  then  made  the  cloth  into  clothing. 

With  the  coming  of  the  Factory  System  all  was  changed — 
revolutionized.  Barring  garden  products  and  a  few  other  food 
products,  the  vast  majority  of  all  the  families  in  America  today 
produce  absolutely  nothing  in  the  finished  form  which  they 
themselves  consume!  And  yet  no  rational  mind  would  claim 
for  a  moment  that  this  has  diminished  the  productiveness  of 
wealth,  or  the  wages  of  labor.  On  the  contrary,  it  has  greatly 
increased  both — multiplying  them  many  fold.  And  yet  all 
this  industrial  progress  was  made  possible  only  by  the  fact  of 
Trade — both  domestic  and  foreign. 

This  broad  view  of  International  Trade  enables  us  the  better 
to  see  how  perfectly  the  Fordney-McCumber  idea  of  things 
represents  what  Darwin  called  "arrested  development" — or, 
better  still,  "reversion  to  previous  type."  The  idea  which 
builds  High  Tariff  Walls  in  the  world  of  today,  belongs  to  that 
primitive,  undeveloped  brain  so  splendidly  adjusted  to  the  prim- 
itive economic  conditions  when  Trade  was  unknown,  when  every 
"foreigner"  was  a  foe,  and  when  each  family,  or  clan,  produced 
All  the  Things  That  It  Consumed. 

The  illustration  of  the  Two  Islands  enables  us  to  see,  also, 
that  the  so-called  "cost  of  production"  theory  is  part  and  parcel 
of  the  Protectionist  theory.  If  the  one  falls,  and  fall  it  must, 
the  other  goes  down  with  it. 

Now  just  what  is  the  limitation  which  the  cost-of-production 
theory  places  on  the  avarice  and  rapacity  of  the  "protected" 
Interests?  This  theory  is  that  the  tariff  rate  on  Foreign  Goods 
shall  be  no  higher  than  is  necessary  to  raise  their  cost  to  home 
Consumers  to  that  price  level  actually  required  in  order  to  make 
a  "reasonable  profit"  on  the  competing  Home  Goods. 

For  example,  the  cost-of-production  theory  would  say  to  the 
owners  of  wheat  lands  on  Coal  Island:  "You  can  have  a  tariff 
of  500%  on  your  wheat,  but  you  cannot  have  a  tariff  rate  of 
a  1000%  or  of  even  600%.  Such  rates  would  be  excessive,  'un- 
conscionable'— extortionate."     But  I  submit  to  you  that  to 


76  TARIFF  PRIMER 

pass  such  a  law  as  will  enable  the  Producers  of  wheat  on  Coal 
Island  to  compel  the  Consumers  of  wheat  to  pay  even  six  times 
as  much  for  wheat  as  they  would  have  to  pay  in  the  Open  Mar- 
ket— or  any  price  above  the  Open  Market  Price — is  also  ex- 
tortion. 

Furthermore,  if  the  "difference  in  the  cost  of  production  at 
home  and  abroad"  could  be  accurately  determined  and  equalized 
thru  Tariff  Rates — a  physical  and  mathematical  impossibility 
— what  would  be  its  effects  on  the  world?  Simply  this:  It 
would  deprive  the  whole  human  race  of  the  enormous  and  in- 
calculable benefits  and  blessings  of  Commerce — AND  MAKE 

THE  SUPPORT  FO  THE  PRESENT  POPULATIOM  OF  THE  GLOBE 
IMPOSSIBLE! 

In  1846,  as  the  result  of  20  years  of  intense  struggle  and 
agitation,  led  by  Richard  Cobden  and  John  Bright,  England 
abolished  her  Corn  Laws — tariffs  on  farm  products.  It  did 
not  establish  Free  Trade,  because  the  products  of  Trade  were 
still  taxed.  But  it  did  abolish  the  principle  of  Protection.  No 
tariffs  were  levied  on  foreign  products  competing  with  similar 
home  products.  It  is  to  me  the  most  dramatic,  heroic  and  in- 
tellectual period  in  English  History. 

As  the  result  of  the  long  campaign  in  the  principles  of  Poli- 
tical Economy  and  Free  Trade  which  Cobden  and  his  followers 
had  conducted,  Lord  John  Russell,  in  a  letter  to  his  London 
constituents  in  1845,  wrote  as  follows:  "I  used  to  be  of  the 
opinion  that  corn  was  an  exception  to  the  general  rule  of  poli- 
tical economy."  He  had  supposed  that  while  there  should  be 
Free  Trade  in  everything  else,  there  should  be  Protection  in 
foodstuffs.  He  had  now  changed  his  mind,  for  he  ended  his 
letter  by  saying:  "Let  us,  then,  put  an  end  to  a  system  which 
has  proved  to  be  the  blight  of  commerce,  the  bane  of  agricul- 
ture, the  source  of  bitter  division  among  classes,  the  cause  of 
penury,  fever,  mortality  and  crime  among  the  people." 

The  reader  is  referred  to  Ridpath's  "Universal  History"  for 
a  most  dramatic  account  of  this  mighty  event  in  human  history. 
He  is  also  referred  to  a  Chapter  in  "The  Tariff  and  the  Trusts" 
by  Franklin  Pierce:  "How  England  Got  Free  Trade."  I  will 
suggest  also  a  small  book  recently  published  in  England  under 
the  title:  "The  Hungry  Forties."  This  book  is  made  up 
entirely  of  letters  and  interviews  of  the  "oldest  inhabitants" 
whose  memories  went  back  to  the  direful  days  in  England  when 
she  had  a  Protective  Tariff.  It  was  edited  by  a  daughter  of 
Richard  Cobden,  Mrs.  Cobden  Unwin.     It  is  the  best  detailed 


My  Two  Islands  77 

history  of  the  economic  condition  of  the  common  people  of 
England  that  has  ever  been  written. 

Ridpath  thus  presents  the  terrible  conditions  which  existed 
under  a  Protective  Tariff  in  England  :"Circumstances  favored, 
as  they  have  rarely  favored,  the  cause  of  the  reforming  party. 
That  most  unanswerable  of  all  arguments,  Human  Misery, 
came  to  the  aid  of  the  propaganda.  Wretchedness,  woe,  want, 
starvation,  despair,  uttered  their  voices,  and  the  cry  at  length 
reached  the  profoundest  recesses  of  prejudice  and  conservatism. 
It  reverberated  through  the  Kingdom.  The  towns  were 
shaken  at  first  and  then  the  countryside  began  to  heave  and 
swell.  It  was  not,  as  we  have  said,  the  voice  of  man,  but  the 
voice  of  hunger,  of  thirst,  The  CLAMOR  OF  WOMEN  AND 
Children  for  Bread." 

In  his  great  debate  on  the  Tariff  with  James  G.  Blaine,  in  the 
North  American  Review — back  in  the  80's — Gladstone  showed 
that  the  abolition  of  Protection  in  England  had  increased  the 
wages  of  the  working  classes  of  England  100%.  It  thus  in- 
creased their  wages  by  INCREASING  Their  PURCHASING 
Power. 

Every  Protectionist  in  Congress  has  had  to  admit  that  wages 
are  higher  in  England  than  in  any  other  country  in  Europe,  and 
that  they  are  lotvest  where  there  is  the  highest  "Protection." 
In  short,  there  can  be  no  hope  for  the  abolition  of  Poverty,  or 
the  abolition  of  War,  until  this  country — and  all  other  coun- 
tries— substitute  for  the  iniquitous  Class  Legislation  of  Pro- 
tective Tariffs,  the  maxim  of  Thomas  Jefferson:  EQUAL 
Rights  for  All— Special  Privileges  to  None. 

Therefore,  whatever  obstructs  the  free  working  of  this  univer- 
sal, world-wide  Law  of  Trade,  Is  TO  THE  Detriment  of  the 
Human  Race.  Whoever  favors  its  obstruction,  whoever  ad- 
vocates the  enactment  of  a  Protective  Tariff,  is  doing  all  in  his 
power  To  INCREASE  THE  AMOUNT  OF  LABOR  WHICH  MAN- 
KIND Must  Perform  In  Order  to  Live.  He  is  not  friend 
but  foe.  While  his  ignorance  of  the  fact  that  this  effect  will 
follow,  and  always  has  followed,  may  exempt  him  from  moral 
condemnation;  IT  DOES  NOT  EXEMPT  THE  HUMAN  RACE 
From  the  Disastrous  Effects  of  Building  Tariff 
Walls. 


Revenue  Tariffs  vs.  Protective  Tariffs  79 


CHAPTER  XXL 
Revenue  Tariffs  vs.  Protective  Tariffs 

There  are  two  distinct  classes  of  Tariff  Walls.  And  this  for 
the  reason  that  there  are  two  distinct  theories,  or  Systems  of 
Thought,  relative  to  the  Tariff— the  PROTECTIVE  THEORY 
and  the  REVENUE  THEORY. 

The  Protective  Theory  has  been  associated  with  the  Repub- 
lican Party  almost  from  the  beginning  of  its  history,  but  found 
its  first  distinctive  expression  in  the  High  Tariffs  of  1867  and 
1870.  The  doctrine  of  "Tariff  for  Revenue  only"  has  been  pro- 
claimed and  defended  by  the  Democratic  Party  thruout  its  long 
history,  dating  back  to  its  founder,  Thomas  Jefferson. 

Turning  to  the  illustration,  the  first  thing  that  strikes  our 
attention  is  the  fact  that  the  PROTECTIVE  TARIFF  WALL  is 
much  higher  than  the  REVENUE  TARIFF  WALL — more  than 
twice  as  high.  This  fundamental  distinction  has  set  the  two 
parties  directly  against  each  other  in  the  framing  of  every 
Tariff  Bill  from  1867  down  to  the  Fordney-McCumber  Tariff. 

Why  is  it  that  one  party  always  wants  high  tariff  rates,  the 
other  always  wants  low  tariff  rates?  This  direct  conflict  be- 
tween them  is  due  wholly  to  the  attitude  of  each  political  party 
in  reference  to  taxing  the  general  public — not  for  the  support  of 
the  Government— But  For  THE  SUPPORT  AND  ENRICH- 
MENT OF  Private  Individuals  and  Corporations. 

On  this  vital  issue  the  Republican  Party  affirms  and  the 
Democratic  Party  denies;  declaring  that  the  RIGHT  TO  TAX 
begins  and  ends  IN  THE  Needs  OF  THE  GOVERNMENT;  and 
that  no  party,  and  no  government,  has  the  right  to  tax  the 
general  public  FOR  THE  Benefit  of  Private  Individuals 
— unless  they  are  recognized  as  paupers,  or  are  justly  entitled 
to  government  bounty  for  military  service  in  defence  of  the 
state. 

As  pointed  out  in  Chapter  X,  the  increased  price  of  Foreign 
Goods,  due  to  the  Tariff,  goes  into  the  Public  Treasury.  This 
I  have  called  the  Revenue  Branch  of  the  Tariff.  The  increased 
price  of  Home  Goods,  due  to  the  Tariff  on  Foreign  Goods,  goes 
into  Private  Pockets.  This  is  the  Protective  Branch  of  the 
Tariff.     To  it  the  Democratic  Party  is  utterly  opposed. 


80  TARIFF  PRIMER 

On  the  other  hand,  the  Repubhcan  Party  for  generations  has 
staked  its  claims  to  the  suffrage  of  the  American  people  on  the 
fact  that  at  every  opportunity  it  has  made  the  stream  of  wealth 
which  the  Tariff  pours  into  private  pockets  just  As  LARGE  As 
It  Could  Be  Made,  regarding  the  production  of  that  stream 
of  wealth  as  the  real  object  of  a  Tariff. 

With  the  Revenue  Theory,  raising  revenue  for  the  govern- 
ment is  the  only  legitimate  purpose  of  a  Tariff.  It  regards  the 
increased  price  of  Home  Goods  resulting  as  purely  "incidental", 
undesirable,  but  practically  inevitable  under  this  mode  of  taxa- 
tion. But  it  makes  this  contribution  to  the  enrichment  of 
private  individuals  as  small  as  possible  by  levying  low  rates  in- 
stead of  high  rates. 

With  the  Protective  Theory,  on  the  other  hand,  raising 
revenue  for  the  Government  is  purely  "incidental";  while  rais- 
ing revenue  for  private  pockets  is  the  real  purpose  in  taxing 
Foreign  Goods.  It  maintains  that  the  whole  prosperity  and 
industrial  progress  of  the  nation  is  due  to  the  employment  of 
this  "policy"  in  the  past.     It  stands  for  High  Tariffs. 

Not  that  the  party  is  opposed  to  raising  government  revenue 
by  Indirect  Taxation — of  which  the  Tariff  is  the  most  iniqui- 
tous form.  It  favors  this  mode  of  taxation.  It  was  the  Demo- 
cratic Party  that  took  the  first  step  towards  taxing  the  people, 
not  on  their  necessities,  but  in  proportion  to  their  ABILITY  TO 
Pay.  There  was  embodied  in  the  Underwood  Tariff  a  Gradu- 
ated Income  Tax.  Later  on,  the  Wilson  Administration  sup- 
plemented this  with  a  Corporation  Tax,  an  Inheritance  Tax, 
and  an  Excess  Profits  Tax.  THIS  WAS  THE  GREATEST 
Step  Towards  Social  Justice  that  Has  Been  Made 
IN  Taxation  Since  the  Founding  of  the  Republic! 

Great  is  the  contrast  between  raising  Government  revenues 
by  a  Tariff  tax,  and  raising  them  by  a  Graduated  Income  and 
Corporation  Tax.  One  is  a  tax  on  Want,  the  other  is  a  tax  on 
Wealth.  One  is  a  tax  on  Necessities,  the  other  is  a  tax  on 
Possessions.  One  is  a  tax  on  what  you  must  get  in  order  to 
live,  the  other  is  a  tax  on  what  you  actually  have.  In  short, 
one  is  a  tax  on  Expenditures — the  other  is  a  tax  on  Incomes. 

The  reason  for  the  change  was  clearly  stated  by  Senator 
Underwood— then  Chairman  of  the  Ways  and  Means  Com- 
mittee— when  he  introduced  his  bill  in  the  House,  April  23, 
1913.     He  said: 

"The  Democratic  Party  stands  for  a  Tariff  for  revenus  only,  with  em- 
phasis on  the  'only'.      We  do  not  propose  to  tax  one  man  for  the  benefit  of  an- 


Revenue  Tariffs  vs.  Protective  Tariffs  81 

other,  except  for  the  necessary  revenue  we  must  raise  to  administer  this 
government  economically." 

"The  time  has  come  in  this  country  when  the  great  untaxed  wealth  of 
America  must  and  shall  bear  its  fair  share  of  the  burden  of  running  the 
government  of  the  United  States.  We  remove  the  taxes  at  the  custom 
house  on  necessaries  purposely  to  levy  a  tax  on  wealth." 

The  fact  must  not  be  overlooked  that  the  Underwood  Tariff, 
to  the  extent  of  its  rates,  was  a  Protective  Tariff.  Any  Tariff,  no 
matter  how  low,  yields  "protection."  Senator  Underwood 
himself  has  steadily  maintained  that  the  rates  in  his  Tariff  are 
excessive  in  reference  to  cotton  and  woolen  goods.  Custom 
house  reports  show  them  going  as  high  as  60%  in  1921.  Mill- 
ions were  made  under  them  by  the  American  manufacturers  of 
these  goods.  And  yet  the  Fordney  Tariff  has  more  than 
doubled  these  rates  on  cotton  and  woolen  goods. 

I  maintain  that  the  Underwood  Tariff  was  the  best  tariff 
measure  ever  enacted  in  this  country.  It  was  so  for  three 
reasons:  First,  because  it  contained  a  Graduated  Income  Tax, 
later  on  supplemented  by  a  Corporation  Tax,  Inheritance  Tax, 
etc.  Second,  because  it  put  practically  all  raw  materials  on  the 
Free  List.  Third,  because  the  rates  on  its  "dutiable"  goods 
are  lower  than  in  any  previous  Tariff  since  the  Civil  War. 

There  are  three  ways  by  which  the  Underwood  Tariff  can  be 
improved:  (1)  Extend  and  perfect  its  forms  of  Direct  Taxation. 
(2)  Gradually  put  on  the  Free  List  all  products  that  are  con- 
tinuously sold  in  foreign  countries.  (3)  Lower  its  excessive 
rates  on  cotton  and  woolen  goods. 

The  tendency  of  the  present  Administration  has  been,  and 
will  continue  to  be,  not  to  raise  but  to  lower  the  direct  taxes 
on  the  millionaires  and  "swollen  fortunes"  of  the  country,  thus 
throwing  the  burden  more  and  more  on  the  toiling  millions  thru 
Indirect  Taxation — the  Tariff,  Sales  Taxes,  Luxury  Taxes,  etc. 

The  issue  in  this  country  is  the  issue  in  every  country.  Tariff 
Taxes  and  other  forms  of  Indirect  Taxation  have  been  the 
means  thruout  the  whole  of  recorded  history  for  the  plunder, 
impoverishment  and  oppression  of  mankind.  Thus  does  there 
emerge  from  the  Tariff  Issue  the  one  great  issue  of  all  the  ages. 
That  issue  is  this:  (1)  to  abolish  all  forms  of  Indirect  Taxation. 
(2)  To  stop  taxing  people  for  the  support  and  enrichment  of 
Privileged  Classes,  taxing  them  only  for  the  support  of  the 
Government.  (3)  And  to  tax  them  for  it,  not  on  their  necessities, 

But  in  Proportion  to  Their  Ability  to  Pay.  Then, 
and  not  till  then,  will  we  have  an  honest  System  of  Taxation — 
A  Real  Repubuc! 


82 


TARIFF  PRIMER 


APPENDIX 

TOTAL  IMPORTS  AND  EXPORTS  OF  MERCHANDISE  AND  BULLION 
FROM  1790  TO  1921 

(Fiscal  Years  Ending  June  30th) 


YEARS 

IMPORTS 

1790 

23,000.000 

1791 

29,200.000 

1792 

31.500.000 

1793 

31.100,000 

1794 

34.600,000 

1795 

69.756,268 

1796 

81,436,164 

1797 

75,379,406 

1798 

68,551,700 

1799 

79,069,148 

Total 

523,592,686 

1800 

91,252,768 

1801 

111,363,911 

1802 

76,333,333 

1803 

64,666,666 

1804 

85,000,000 

1805 

120,600,000 

1806 

129,110,000 

1807 

138,500,000 

1808 

56,990,000 

1809 

59,400,000 

Total 

933,216,678 

1810 

85,400,000 

1811 

53,400,000 

1812 

77,030,000 

1813 

22,005,000 

1814 

12,965,000 

1815 

113,041,274 

1816 

147,103,000 

1817 

99.250.000 

1818 

121,750,000 

1819 

87,125,000 

Total 

819,069,274 

1820 

74,454,000 

1821 

62,585,724 

1822 

83,241,541 

1823 

77,579,267 

1824 

80.548,142 

1825 

96,340,075 

1826 

84,974,477 

1827 

79,484,068 

1828 

88,509,824 

1829 

74,492.527 

Total 

802,209.645 

EXPORTS 
20,205,156 
19,012,041 
20,753,098 
26,109,572 
33,043,725 
47,989,872 
58,574,625 
51,294,710 
61,327,411 
78,665,522 

416,975,732 

70,971,780 
93,020,513 
71,957,144 
55,008.033 
77,699,074 
95,566.021 
101,536,963 
108,343,150 
22,430,960 
52,203,233 

748,736,871 

66,757,970 
61,316,832 
38,527,236 
27,856,017 
6,927,441 
52,557,753 
81,920.062 
87,671,569 
93,281,133 
70,142,521 

586,958,534 

69,691,669 

65.074.382 
72,160.281 
74,699,030 
75,986,657 
99,535,388 
77,595,322 
82,324,827 
72,264,686 
72,358,671 

761,690,913 


Excess  of  Imports 

2,794,844 

10,187,959 

10,746,902 

4,990,428 

1,556,275 

21,766,396 

22,861,539 

24,084,696 

7,224,289 

403,626 

106,616,954 

20.280,988 

18,343,398 

4,376,189 

9,658,633 

7,300,926 

25,033,979 

27,573,037 

30,156,850 

34,559,040 

7,196,767 

184,479,807 

18,642,030 

38,502,764 

6,037,559 
60,483,521 
65,182,938 
11,578,431 
28,468,867 
16,982,479 

245.878,589 

4,762.331 

11,081,260 
2,880,237 
4,561,485 

7,379,155 

16,245,138 
2.133,856 

49,043,462 


Excess  of  Exports 


7,916,832 
5,851,107 


13.767.849 
2,488.658 


3.195.313 

2,840.759 


8.524.730 


Imports  and  Exports  from  1790  to  1921 


83 


YEARS 

IMPORTS 

EXPORTS 

Excess  of  Imports 

Excess  of  Exports 

1830 

70.876,920 

73.849,508 

2.972,588 

1831 

103,191,124 

81.310.583 

21,880,541 

1832 

101.029.266 

87.176,943 

13,852,323 

00 

1833 

108,118,311 

90,140,433 

17,977.878 

00 

1834 

126,521,332 

104,336,973 

22,184  359 

1835 

149,895,742 

121,693,577 

28,202,165 

«- 

1836 

189,980,035 

128,663,040 

61,316,995 

c 

.2 

1837 

140,989.217 

117,419,376 

23,560,841 

1 

1838 

113,717,404 

108,426,616 

5,290,788 

1 ' 

1839 
Total 

162,092,132 

121,028,416 

41,063,716 
235,338.606 

o 

1,266,411,483 

1,034,045,465 

2.972,588 

"o 

1840 

107.141,519 

132,085,946 

24,944,427 

£ 

1841 

127.946.177 

121,851.803 

6,094,374 

SS 

(-1 

1842 

100,162,087 

104,691.534 

4,529.447 

1843 

64,753  799 

84,346,480 

19.592.681 

1844 

108,435,035 

111,200,046 

2,765.011 

1845 

117,254.564 

114,646,606 

2,607,958 

^  1846 

121.691.797 

113,488,516 

8.203,281 

r  1847 

146.545,638 

158,648,622 

12,102,98* 

1848 

154,998,928 

154,032,131 

966,797 

« 

■«)< 

1849 
Total 

147,857,439 

145.755,820 
1,240,747,504 

2.101,619 

00 

1,196,786,983 

19.974.029 

63.934.550 

1850 

178,138,218 

151,898,720 

26.239.498 

^ 
H 

1851 

216,224,932 

218,388,011 

2,163,079 

3 

1852 

212,054.442 

209,658,366 

3.296,076 

1853 

267,978,647 

230,976,157 

37,002,490 

> 

V 

1854 

304.562,381 

278,325,268 

26,237,113 

1855 

261,468,520 

275,156,846 

13,688,326 

4J 

1856 

314,639,942 

326,964,908 

12,324.966 

i 

1857 

360,890,141 

362,960,682 

2.070.541 

1858 

282,613,150 

324.644,421 

42.031.271 

1859 
.  Total 

338,768,130 

356,789,462 

18.021.332 

2,738,238.503 

2,735,762.841 

92.775.177 

90.299.515 

/  1860 

362.166,254 

400,122,296 

37.956.042 

w 

1861 

335,650,153 

249.344.913 

86.305,340 

'S 

1862 

205,771,729 

227.558.141 

21,786.412 

H 

1863 

252,919,920 

268,121,058 

15,201,138 

;« 
^ 

1864 

329,562,895 

264  234,529 

65,328,366 

1865 

248,555,652 

233,672.529 

14,883,123 

1866 

445,512,158 

434,903.593 

10,608,565 

1867 

417,831,571 

355.374,513 

62,457.058 

1868 

371,624,808 

375,733,001 

4,108.193 

1869 
Total 

437,314,255 

343,256,077 

94,058,178 

3.406,909,395 

3,152.320.650 

333,640,530 

79,051,785 

84 


TARIFF  PRIMER 


YEARS 

IMPORTS 

EXPORTS 

Excess  of  Imports 

Excess  of  Exports 

1870 

462.377.587 

450.927,434 

11,450.153 

1871 

541,493.708 

541.262.166 

231.542 

1872 

640.338.766 

524,055,120 

116,283.646 

1873 

663,617.147 

607,088,496 

56,528.651 

1874 

595,861.248 

652.913,445 

57.052.197 

1875 

553,906.153 

605,574,853 

51.668,700 

1876 

476,677,871 

596,890.973 

120,213,102 

1877 

492,097,540 

658.637.455 

166,539,917 

1878 

466,872,846 

728.605.891 

261,733,045 

1879 
Total 

466.073,775 

735,436,882 

269.363,107 

5.359.316,641 

6,101,392,717 

184,493,992 

926,570,068 

1880 

760.989.056 

852,781,577 

91.792,521 

1881 

753.240,125 

921,784.193 

168,544,068 

1882 

767,111,964 

799,959,736 

32,847,772 

1883 

751.670.305 

855.659.735 

103,989,430 

>  18S4 

705,123,955 

807,646.992 

102.523  037 

1885 

620,769,652 

784,421.280 

163.651.628 

1886 

674,029,792 

751.988,240 

77,958.448 

1887 

752,490,560 

752,180.902 

309,658 

1888 

783,295.100 

742,368,690 

40,926,410 

1889 

Total 

774.094,725 

839,042,908 

64.948,183 

7.342.815.234 

8,107.834,253 

41,236,068 

806,255,087 

^  1890 

823,286,735 

909,977,104 

86,690,369 

'  1891 

881,175,643 

993,434,452 

112.258,809 

1892 

897,057,002 

1,113,284,034 

216,227,032 

1893 

910,768,555 

997,083,357 

86,314,802 

,  1894 

740,730,293 

1,019.569,898 

278.839,605 

1895 

788.565,904 

921.301.932 

132,736,028 

1896 

842,026,925 

1,055,558,555 

213,531,630 

1897 

880,278,419 

1,153,301.774 

273,023,355 

'  1898 

767,369,109 

1.301.993.960 

534.624,851 

1899 
Total 

816,778,148 

1.320.864.443 

504,086,295 

8,348,036.733 

10.786,369,509 

2,438.332.776 

1900 

929.770.670 

1.499,462,116 

569.691.446 

1901 

925.609,873 

1,605,235,348 

679.625.475 

1902 

983.574.456 

1,480,020.741 

496.446.285 

1903 

1,094.864,755 

1,511.482,533 

416,617.778 

1904 

1,117,911,553 

1,591,759,959 

473.848,406 

1905 

1,198,646,897 

1,660,004,502 

461.357.605 

1906 

1,367,226,716 

1,848,307.154 

481,080,438 

1907 

1.591.878.298 

1.988.989,327 

397,111,029 

1908 

1.387.337,210 

1,991,127.472 

603.790.262 

1909 
^  Total 

1,399,879.023 

1,810,225.714 

410.346,691 

11.996.699,451 

16.986,614,866 

4,989,915.415 

Imports  and  Exports  from  1790  to  1921 


85 


t 


YEARS 

IMPORTS 

EXPORTS        Excess  of  Imports     Excess  of  Exports 

'  1910 

1.645,504,529 

1.918.834.796 

273.230,267 

1911 

1,646,770,367 

2.136.579.810 

489.809,443 

1912 

1.749,251,653 

2.326,541.422 

577,289,769 

1913 

1.923,470,775 

2,615.261.082 

691,790,307 

1914 

1.990,790,920 

2.531,582.700 

540.791.780 

1915 

1.878.848,818 

2.965,755.675 

1,086,906,857 

1916 

2,731,047,186 

4.483.523.956 

1.752.476.770 

1917 

3,671,534,774 

6.660.249.580 

2.988.714.806 

1918 

3,140.407.039 

6.249.744.994 

3.109.337.955 

1918 

1.533.363,204 

3.353.497.069 

1.820.133.865 

1919 

4,070.308,996 

8,527,632,289 

4.457,323.293 

1920 

5,783.609.804 

8,663.723.739 

2.880,113.935 

Total 

31,764,908,065 

52.432.927.112 

20,668.019,047 

1921 

2,509,147,570 

4.485.031.356 

1,975,883,786 

Total 

34.274.055.635 

56.917,958.468 

23.643.902,833 

Congressman  Fess,  of  Ohio — in  1914 — is  reported  to  have  said:  "Any  in- 
dustrial history  of  the  United  States  shows  that  our  export  trade  began  with 
the  Crimean  war,  back  in  the  fifties."  No  greater  distortion  of  the  facts  of 
history  is  possible.  It  was  to  refute  the  volumes  of  such  Protectionist  false- 
hoods that,  with  much  patient  research,  I  have  given  the  reader  the  above 
table.  It  is  a  liberal  education  in  itself  as  to  our  Foreign  Trade,  carried 
thru  131  years  of  history.  The  successive  Tariffs  are  also  given.  Study  the 
two  together.  Make  your  own  deductions  as  to  what  extent,  and  how, 
Tariff  Walls  affect  our  Foreign  Trade. 


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A  Study  in  World  Commerce  89 

A  STUDY  IN  WORLD  COMMERCE 

The  two  preceding  charts  are  designed  to  give  the  reader  a  general  vision 
of  the  World's  production  of  twelve  leading  commodities. 

These  charts  will  give  you  stronger  and  clearer  convictions  of  the  abso- 
lute necessity  for  International  Trade  than  you  ever  had  before.  No  one 
can  have  a  true  idea  of  Trade  who  does  not  include  in  his  mental  picture 
the  whole  of  the  1,702,000,000  of  the  earth's  inhabitants,  realizing  that 
each  one  of  them  must  have  food,  clothing  and  shelter — and  must  have 
them  daily. 

When  taking  this  broad  view  of  Trade  we  recognize  the  fact  that  the 
Exchange  of  wealth  is  as  necessary  as  the  Production  of  wealth.  Without 
Trade,  no  advance  is  possible  beyond  that  crude,  primitive  condition  in 
which  each  human  being — like  the  lower  orders  of  animals — must  provide 
for  himself  all  of  life's  necessities. 

Civilized  life  requires  that  hundreds  of  products  shall  enter  into  the  daily 
use  and  consumption  of  each  human  being.  No  human  being  produces 
scarcely  even  one  of  them  for  himself  in  its  entirety.  How,  then,  can  he 
get  all  the  rest  of  them.  Only  by  producing  something  in  excess  of  his  own 
needs — and  trading  his  surplus  for  the  rest. 

What  is  true  of  the  individual  is  true  of  nations.  Countries  in  which  the 
Production  of  any  given  product  exceeds  its  Consumption,  must  export 
their  excess  to  the  scores  of  countries  in  which  its  Consumption  exceeds  its 
Production.  That  alone  is  the  law,  and  THE  UNIVERSAL  PROCESS 
of  CiviUzed  life. 

The  first  two  tables  give  a  comparative  view  of  the  sources  of  supply  for 
12  leading  commodities,  together  with  the  six  countries  producing  them 
most  abundantly. 

In  reference  to  any  one  of  the  products  listed,  it  is  probable  that  all  of  the 
six  countries  imder  it  Produce  more  of  it  than  they  Consume.  Hence  the 
necessity  for  Exporting.  But  if  you  go  on  down  the  line  of  the  countries 
producing  it,  you  will  soon  reach  those  that  produce  less  of  it  than  they 
Consume.  Add  to  these  the  scores  of  other  countries  not  producing  it  at 
all;  and  yet,  which  must  consume  it  in  order  to  live.  Now  how  can  they  get 
these  commodities  of  which  they  Consume  more  than  they  Produce,  except 
by  Importing?  But  how  could  they  import  if  there  were  no  such  thing  as 
International  Trade?  THUS  DO  WE  SEE  THAT  COMMERCE  IS  AS 
ESSENTIAL  TO  THE  LIFE  OF  OUR  EARTH'S  INHABITANTS  AS 
THE  AIR  THEY  BREATHE. 

This  brings  us  to  the  table  on  the  opposite  page.  It  shows  us  that  Com- 
merce is  in  itself  a  perfect  system  of  International  Bookkeeping.  "The 
equity  of  it  is  so  exact  that  it  balances  all  accounts  with  perfect  precision. 
Excess  of  Production  over  Consumption,  as  in  the  case  of  Corn,  is  balanced 
by  an  Excess  of  Exports  over  Imports. 

On  the  other  hand,  the  excess  of  Consumption  over  Production — as  shown 
in  the  case  of  Flax  Seed,  Wool  and  Sugar — must  be  made  up  by  an  Excess 
of  Imports  over  Exports.  And  since  we  must  import  them — or  go  without 
—WHY  SHOULD  WE  INCREASE  THEIR  COST  TO  OURSELVES 
BY   A  TARIFF  WALL? 

So  broad  and  fundamental  is  the  truth  here  expressed,  that  the  table  can 
be  applied  to  each  household — and  to  each  individual.  Here  is  an  outline 
80  universal  in  its  scope,  that  it  can  be  applied  to  every  product  in  reference 
to  each  nation,  and  in  reference  to  each  of  the  hundreds  of  millions  of 
humanity! 


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Effects  of  War  on  Prices  91 


EFFECTS  OF  WAR  ON  PRICES 

On  the  opposite  page  is  a  graphic  portrayal  of  the  rise  and  fall  of  prices, 
due  to  War.  It  pictures  to  the  eye  and  the  imagination  the  Story  of  World 
Prices  for  a  period  of  112  years.  This  remarkable  diagram  was  given  in 
the  "Literary  Digest"  several  months  ago. 

The  Napoleonic  Wars  really  began  with  Napoleon's  Italian  Campaign 
in  1796,  terminating  with  the  battle  of  Waterloo,  June  18,  1815.  The  aver- 
age prices  in  all  the  markets  of  the  world  reached  their  highest  peak  by  the 
end  of  the  following  year.  Then,  as  shown  in  the  diagram,  the  Interna- 
tional Market  Price  dropped  fully  100%  in  the  next  two  or  three  years. 
Prices  continued  to  decHne  thruout  the  earth  between  1820  and  1830,  rose 
slightly  before  1840,  and  again  made  a  rapid  decline  between  1840  and  1850. 
They  rose  again  between  1850  and  1860. 

Then  came  the  lamentable  war  between  the  North  and  the  South,  which 
ended  April  9,  1865.  Prices  reached  their  highest  point  in  the  world's 
market  about  1867.  In  this  country  the  general  Price  Level  was  continued 
to  about  1870,  or  '72.  They  dropped  nearly  150%  in  the  Worid's  Market 
by  1880.  The  international  Price  Level  continued  steadily  to  decline  down 
to  1897.  In  this  country  scores  of  products  did  not  reach  their  lowest  point 
until  1900,  but  the  lowest  average  for  all  products  was  reached 
about  1897. 

Then,  both  for  this  country  and  the  world,  prices  steadily  rose  up  to  the 
opening  of  the  World  War.  From  that  date  to  1920,  the  International 
Price  Level  rose  fully  150%,  according  to  the  diagram,  reaching  a  higher 
peak  than  during  the  Civil  War,  and  to  as  high  a  level  as  was  attained  at 
the  close  of  the  Napoleonic  Wars.  This  gives  us  a  World  Vision,  projected 
thru  112  years  of  history,  of  the  law  of  Supply  and  Demand. 

Thus,  over  and  beyond  the  reach  of  the  narrow  provincial  minds,  which 
cannot  see  beyond  the  borders  of  their  own  little  state  or  province — and 
which  think  that  by  building  Tariff  Walls  they  can  keep  the  prices  of  their 
own  products  out  of  the  mighty  stream  of  price  currents  which  sweeps 
round  the  whole  earth — rises  the  supreme  law  of  the  economic  world,  the 
law  of  Supply  and  Demand. 

Each  human  being  is  a  part  of  this  universal  Demand,  and  furnishes  some 
portion  of  its  universal  SuppHes,  if  a  Wealth  Producer.  It  is  not  local,  but 
general.  It  is  in  operation  everywhere.  While  there  are  as  many  markets 
— as  many  Demands  for  the  necessities  of  life — as  there  are  human  beings, 
yet  this  great  Economic  Law  sees  all  mankind,  not  as  many,  but  as  One. 

AH  the  millions  of  nature's  children  are  but  units  in  that  great  Social 
Organism  which  spreads  itself  across  national  boundaries,  reaching  from 
pole  to  pole,  round  the  whole  earth — binding  all  mankind  into  one  supreme 
Demand  for  the  necessities  of  life.  Then  it  calls  upon  every  land  and  clime, 
every  race  and  nation,  to  furnish  the  material  products  which  can  feed  the 
hungers  and  satisfy  the  needs  of  this  grand  total  of  wants  of  all  humanity. 

And  the  Social  Organism  distributes  its  supplies  among  the  teeming 
miUions  of  its  units  just  as  perfectly  as  does  the  Physical  Organism^ach 
in  accordance  to  its  Needs.  The  Price  of  any  product  is  always  highest 
where  its  Needs  are  greatest.  It  is  the  relation  of  the  quantity  of  the  Supply 
to  the  quantity  of  the  Demand  of  each  human  being,  that  makes  up  that 
vast  and  complex  thing,  called  the  World's  Market  Price.  "Who  knows 
what  earth  needs  from  earth's  lowliest  creatures?"  Only  the  law  of  Supply 
and  Demand  can  tell  us. 


Price  History  from  1850  to  1920  93 


PRICE  HISTORY  FROM  1850  TO  1920 

In  the  diagram  on  the  opposite  page  is  presented  to  the  eye  of  the  reader 
the  History  of  Prices  in  our  own  country,  from  1850  to  1920,  taken  from  the 
U.  S.  Statistical  Abstract.  I  have  given  the  average  price  for  the  five  years, 
ending  with  the  close  of  the  five  year  period.  The  price  of  Bar  Iron  is  the 
number  of  dollars  a  ton,  the  price  of  Wool  is  by  the  pound,  and  the  price  of 
Cotton  Sheeting  is  by  the  yard. 

The  important  thing  in  the  diagram  is  its  showing  of  the  general  trend  of 
prices.  What  is  true  of  these  three  products  is  true  of  the  Price  Level  of  all 
domestic  products  for  the  70  years  charted,  and  also  of  the  World  Price 
Level,  as  shown  in  the  previous  chart.  Tariffs  or  no  Tariffs,  they  run  paral- 
lel with  the  World  Price  Level— THEY  ALL  GO  UP  OR  DOWN  TO- 
GETHER. 

If  you  have  been  reading,  or  hearing.  Protectionists'  speeches  of  late,  you 
would  say  that  the  period  from  1850  to  1860  must  have  been  under  High 
Protective  Tariffs,  And  that  the  period  from  1865  to  1900  must  have  been 
under  those  Democratic  "free  trade"  Tariffs. 

But  the  facts  are  almost  wholly  the  other  way.  By  looking  at  the  top 
of  the  diagram  you  will  see  that  the  period  from  1850  to  1860,  was  under  the 
Walker  Revenue  Tariff  of  1846,  with  average  rates  of  only  25%.  In  1857 
these  rates  were  reduced  to  about  18%.  We  entered  the  war  on  that  basis. 
In  fact,  the  only  nominally  "free  trade"  period  in  our  whole  history  was 
from  1861  to  about  1867.  During  this  period,  when  tariffs  were  laid  on 
Foreign  Goods,  they  were  also  laid  on  similar  Home  Goods — and  they  were 
laid  on  Home  Goods  first!  That  is,  external  revenues  were  balanced  with 
internal  revenues. 

Abraham  Lincoln  was  elected  President  in  1860.  From  that  date  to 
1913,  is  a  period  of  53  years.  Of  those  53  years,  only  three  of  them  were 
under  a  Democratic  Tariff.  I  refer  to  the  Cleveland  Tariff,  from  1894  to 
1897 — and  which  was  so  much  of  a  "protectionist"  measure  that  he  refused 
to  sign  it!  The  whole  of  the  remaining  50  years — quite  a  long  stretch — were 
lived  under  RepubUcan  Tariffs.     AND  YET  PRICES  WENT  DOWN* 

Beginning  with  1867,  they  were  all  High  Protective  Tariffs.  The  Tariff 
of  1883  increased  the  rates  in  the  Tariffs  of  1867  and  1870.  The  McKinley 
Tariff  of  1890  made  them  still  higher.  The  rates  in  the  Dingley  Tariff  of 
1897  were  outrageous,  tho  slightly  lower  than  those  of  the  McKinley  Tariff; 
while  the  Payne-Aldrich  Tariff  of  1909  increased  the  rates  in  the  Dingley 
outrage.  There  you  have  our  Tariff  History  and  our  Price  History  side 
by  side. 

Take  the  case  of  wool.  In  1867  it  was  given  the  highest  rate  in  our 
history.  And  yet  the  price  of  wool  went  down.  It  declined  rapidly  till 
1870.  It  averaged  about  eight  cents  a  pound  higher  for  the  next  five  years. 
Was  there  an  increase  in  the  Tariff  Rate?  On  the  contrary,  there  was  a 
10%  reduction  of  this  rate,  and  of  all  rates,  in  1872.  The  Tariff  of  1883 
restored  the  rates  of  1867.  And  yet  the  price  of  wool  continued  steadily 
to  go  down — on  thru  the  period  covered  by  the  McKinley  High  Tariff. 

The  Cleveland  Tariff  put  wool  on  the  Free  List.  But  the  decline  in  its 
price  was  nothing  as  compared  to  its  decline  under  the  previous  27  years  of 
High  Protection.  This  chart  ought  to  remove  from  the  brain  of  the  reader 
the  last  trace  of  the  whole  "obsession"  of  Protection. 

•     No  theory  of  Prices  can  be  sound  which  does  not  also  consider  the   volume  of   the  world  • 
Money  in  its  relation  to  the  volume  of  the  world's  exchanges,  and  of  the  wealth  in    exchang* 


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Tariff  Rates  from  Custom  House  Reports  95 

A  STUDY  IN  TARIFF  RATES  FROM  CUSTOM  HOUSE  REPORTS 

The  average  rates  collected  at  the  Custom  House  do  not  correspond 
WITH  THE  AVERAGE  RATES  IN  ANY  TARIFF  BILL.  THEY  ARE 
ALWAYS  LOWER.  This  is  due  to  the  fact  that  the  highes  trates  in  all 
Protective  Tariffs  tend  to  be  prohibitive.  They  must  be  prohibitive,  in 
order  to  be  "protective." 

In  the  diagram  on  the  opposite  page  we  have  graphically  presented  the 
average  duties  collected  each  year,  under  each  tariff,  from  1890  to  1920. 
At  the  top  of  the  page  is  given  the  name  of  each  successive  tariff.  The 
space  covered  by  each  is  indicated  by  a  heavy  black  line. 

The  reader  naturally  looks  at  once  for  those  Democratic,  "free  trade" 
Tariffs  he  has  been  hearing  about  all  his  Hfe.  They  have  always  been  given 
in  the  plural,  as  if  there  was  quite  a  bunch  of  them.  Over  and  over  again 
we  have  been  told;  "Whenever  we  have  Democratic  Tariffs  we  always  have 
panics."  He  knows  that  panics,  strikes,  labor  wars,  "hard  times"  and  in- 
dustrial depressions  have  constituted  a  good  part  of  our  past  history.  And 
so  expects  to  see  numerous  "free  trade"  Tariffs. 

But  he  looks  in  vain.  THE  TARIFF  LINE  IS  UNBROKEN.  Where 
are  they?  In  what  years  were  they  passed?  They  do  not  exist.  They 
never  did  exist.  All  this  talk  about  them,  which  fills  up  so  large  a  part  of 
the  Congressional  Record,  is  simply  the  expression  of  ignorance  and  du- 
plicity— the  vaporings  and  deceptions  of  the  demagog.  The  whole  record 
is  before  you.  There  is  in  it  one  Democratic  Tariff,  and  only  one.  Extend 
the  period  back  from  1913  to  1860,  and  you  still  have  but  the  one  Demo- 
cratic Tariff— from  1894  to  1897.  Thus  were  50  years  out  of  the  53  covered 
by  Republican  Tariffs — up  to  the  Underwood  Tariff  of  1913. 

While  there  was  but  one  Democratic  Tariff  in  all  that  time,  there  was  no 
"free  trade"  Tariff.  In  fact  the  phrase,  a  Free  Trade  Tariff,  is  such  a 
contradiction  of  words  as  only  a  Protectionist  would  make.  There  can 
be  no  such  thing  as  Free  Trade,  so  long  as  there  are  such  stupid  and  bar- 
barous things  as  Tariffs.  And  for  the  reason  that  there  can  be  no  such  thing 
as  Free  Trade  as  long  as  the  products  of  Trade  are  taxed! 

The  blessings  of  Free  Trade  can  come  only  when  the  extortions,  plunder 
and  oppression  of  all  Tariff  Walls  have  been  swept  from  the  earth.  And 
this  is  possible  only  when  all  government  revenues  are  raised  by  some  fair 
and  equitable  system  of  Direct  Taxation.  There  was  a  time  when  nearly 
the  whole  of  our  Government's  revenues  were  raised  by  Tariffs.  In  1921, 
only  one  dollar  in  every  14  was  so  raised! 

In  every  Tariff  Bill  there  are  two  classes  of  goods:  dutiable  and  free — 
those  which  must  pay  a  Tariff  Tax,  and  those  which  are  allowed  by  Congress 
to  enter  free.  In  the  diagram  opposite,  the  top  line  represents  the  average 
rates  on  dutiable  goods.  It  is  perhaps  the  more  important  of  the  two.  The 
lower  line  represents  the  combined  rates  on  both  free  and  dutiable.  The 
lower  line  must  be  read  ten  points  below  that  shown  on  the  chart. 

Beginning  with  1899,  the  whole  trend  is  downward,  even  under  High 
Tariffs,  being  only  16  %  in  1920.     The  combined  rate  that  year  was  only  6  %. 

The  proportions  of  Foreign  Goods  coming  in  "free"  under  the  various 
tariffs  are  as  follows:  McKinley,  53.4%;  Cleveland,  49.5%;  Dingley,  45.2%; 
Payne-Aldrich,  52.4%;  Underwood,  67.2%.— 

These  are  the  general  facts  as  to  Tariff  Rates  as  shown  by  Custom  House 
Reports.  The  reader  must  study  the  chart  and  make  any  further  com- 
parisons and  deductions  for  himself. 


96 


TARIFF  PRIMER 


25  LEADING  ARTICLES  EXPORTED.  23  OF  WHICH  ARE  ALSO  IMPORTED 

Exported  Imported 

Cotton  /Raw $t,136.408.Q16  |  138.743.702 

\Manufactured 402.041.277  137,431.814 

Iron  and  Steel 1,1 12.835.237  50.305.603 

Breadstuflfs 1.079.107.701  125.345.323 

Oils 609.671.471  181.815.871 

Meat  and  Dairy  Products 544,074.060  64.374.457 

Veiiiclea 382.207.667  2.901.465 

Coal  and  Coke 359,805,006  7,394,686 

Tobacco 288,693.799  98.562.015 

Leather 190,318,659  36,333,838 

Woods 186,502.152  209,031,235 

Chemicals,  Drugs,  etc 168,999,706  211,628,099 

Copper 133,508,675  90,018.689 

Electrical  Machinery.  Appliances,  etc 101,990,004  (none) 

Sugar  (Refined) 94,877,045  1,015.188.479 

Paper 89.072  289  84.686,652 

India  Rubber 85,436,897  250.334,174 

Fruits  and  Nuts 84,390,424  116,221,857 

Explosives 56,845,689  1.377,176 

Wool  (Raw 4,936,740  126,972.088 

\Manufactured 44,571,002  58,115.537 

Agricultural  Implements 46,277,638  5,716,573 

Fertilizers 36,555.812  51,153.989 

Naval  Stores  (Tar.  Pitch  and  Turpentine) 34.503,389  (none) 

Furs  and  Fur  Skins 32  886,995  93,558  940 

Vegetables 32,784.416  50.420,326 

Paraffine 32.619,318  820,885 

FORDNEY  TARIFF  AT  WORK 

The  following  table  taken  from  the  New  York  American,  Oct.  8.  1922,  shows  how  prices 
have  started  upward,  under  the  Chemical  Schedule,  in  less  than  three  weeks  after  the  tigning 
of  the  bill.     The  same  thing  ia  taking  place  under  other  schedules. 

(per  hundred  pounds  unless  otherwise  stated) 

Before  After 

Barium  Chloride  (per  ton) $85.00  $100.00 

Carbonate  of  Potash 5.00                 6.00 

Caustic  Potash 5.60                  6.50 

Acetic  Acid  (28%) 26.70                32.20 

Alcohol,  wood  (per  gallon) ,. .62                    .72 

Glycerine 17.50                18.00 

White  Lead 7.75                  8.00 

Formaldehyde 9.00                10.50 

Acetone 14.00                17.00 

Bleach 1.75                  2.00 

Citric  Acid 45.00               50.00 

Cocaine  hydrochloride  (per  ounce) 6.25                  7.25 

Menthol  (per  pound) 6.00                  6.25 

Camphor 83.00               86.00 


WOOL  PRICES  FROM  1880  TO  1921 
(in  cents  per  pound) 


1880 

...   55 

1890. 

1881 

...  .49 

1891, 

1882 

...  .46 

1892 

1883 

...  .42 

1893 

1884 

...  .40 

1894 

1885 

...  .33 

1895 

1886 

...  .36 

1896. 

1887 

...  .38 

1897. 

1888 

...  .35 

1898. 

1889 

...  .38 

1899. 
1900 

.37 

1901 

...  .2» 

1912  ... 

32 

.37 

1902 

...  .26 

1913 

36 

.35 

1903 

.  . .  .31 

1914 

30 

.33 

1904 

.  .  .  .32 

1915 

36 

.24 

1905 

...  .35 

1916 

45 

.20 

1906 

.  .  .  .38 

1917 

57 

.31 

1907 

.  .  .  .39 

1918 

90 

.21 

1908 

.  .  .  .38 

1919 

92 

.30 

1909 

...  .38 

1920 

....  1.12 

.29 

1910 

...  .40 

1921 

. . . .  54 

.30 

1911 

...  .34 

Payne- Aldrick,  Underwood  and  Fordney  Tariffs  97 


PAYNE-ALDRICH,  UNDERWOOD  AND   FORDNEY  TARIFFS 

In  order  to  get  a  comparative  view  of  the  tariff  rates  in  the  last  three 
Tariffs,  I  shall  present  the  contrasts  and  reductions  made  by  the  Underwood 
Tariff  to  the  rates  in  the  Payne-Aldrich  Tariff,  as  stated  by  Senator  Under- 
wood on  the  day  he  introduced  his  bill  in  the  House — April  23,1913 — and 
which  comparisons  were  undenied  thruout  the  debate.  Mr.  Underwood 
said: 

"Now,  I  would  like  the  gentlemen  on  that  side  of  the  House  (the  Repub- 
lican side,)  who  have  maintained  this  indefensible  system  of  taxing  the  poor 
for  five  decades,  to  listen  to  the  other  side  of  the  story.  On  common  soap 
you  placed  a  tax  of  20%.     We  have  lowered  the  tax  to  5%. 

"You  taxed  the  furniture  of  the  poor  man's  house  35%.  We  have 
lowered  it  to  15%. 

"You  taxed  bread  and  biscuit  20%.     We  place  them  on  the  Free  List. 

"On  cotton  clothing  you  taxed  the  people  of  this  country  50  %.  We  have 
reduced  it  to  30%. 

"On  the  flannels  that  protect  them  against  the  cold  winter  storms  you 
taxed  the  people  of  the  United  States  over  93%.  We  have  reduced  the 
tax  to  25%  and  35%. 

"The  tax  on  women's  and  children's  dress  goods  under  your  system  of 
levying  a  tax  for  the  benefit  of  the  manufacturer,  was  about  100%.  We 
have  lowered  that  to  35%. 

"You  taxed  the  shoes  of  the  people  of  the  United  States,  after  giving  the 
shoemaker  free  raw  material — and  stating  at  the  time  you  gave  it  that  he 
did  not  need  the  protection — you  gave  him  10%  and  we  give  free  shoes  to 
the  people  of  America. 

"On  the  entire  chemical  schedule  the  tax  was  25.91  %.  Our  taxes  levied 
on  that  schedule  was  19.64%,  or  a  reduction  in  the  chemical  schedule  of 
24%  below  the  Payne  law. 

"On  earths,  earthenware  and  glass  ware,  you  levied  a  tax  of  about  51%. 
We  levy  a  tax  of  33%,  a  reduction  below  the  Payne  Bill  of  35%. 

"On  metals  and  manufactures  of  metals,  you  levied  a  tax  of  34%.  We 
levy  a  tax  of  20%,  a  reduction  below  the  Payne  Bill  of  41%. 

"On  wood  and  the  manufactures  of  wood,  you  levied  a  tax  of  12%  and  we 
leA^  a  tax  of  3}4%,  a  reduction  of  71%.  We  place  most  of  it  on  the  free 
list,  in  order  that  American  workmen  may  have  lumber  with  which  to 
build  their  own  homes. 

"You  have  levied  a  tax  on  sugar  of  48%.  We  have  reduced  that  tax  to 
35%  for  the  next  three  years,  or  a  reduction  of  25%;  and  at  the  end  of  the 
three  years  we  intend,  if  this  bill  becomes  a  law,  TO  PLACE  IT  ON  THE 
FREE  LIST.  So  that  the  one  commodity  above  all  others  that  most 
directly  reflects  the  taxes  levied  at  the  custom  house  no  longer  goes  on  the 
table  of  the  consumer  bearing  the  marks  of  50  YEARS  OF  OPPRESSIVE 
TAXATION  that  our  friends  on  that  side  of  the  House  have  taught  the 
American  consuming  public  to  realize  when  they  open  their  home  door. 

"As  to  tobacco  and  the  manufactures  thereof,  we  consider  them  as  lux- 
uries, or  in  the  nature  of  luxuries,  and  good  revenue  producers,  and  so  made 
no  vital  changes  in  the  schedule. 


98  TARIFF  PRIMER 

"On  agricultural  products  and  provisions  we  have  reduced  the  tax  from 
29%  to  17%,  a  reduction  of  42%. 

"On  spirits,  wines,  and  other  beverages  we  have  left  the  taxes  as  they  are 
in  the  present  law. 

"On  cotton  manufactures  you  taxed  the  public  about  46%.  We  reduced 
the  average  tax  to  30%,  making  a  reduction  of  33%  below  the  Payne  Bill. 

"On  flax,  hemp  and  jute  and  their  manufactures  we  have  reduced  the  tax 
from  45%  to  26%,  a  reduction  of  42%  below  the  Payne  Bill.  (Flax,  hemp 
and  tow  were  afterwards  put  on  the  Free  List.) 

"On  wool  and  manufactures  of  wool,  you  taxed  the  public  nearly  56%. 
We  tax  them  183^%,  a  reduction  in  favor  of  the  American  people  of  67% 
below  the  Payne  Bill. 

"On  silk  goods  the  tax  was  about  52%.    We  tax  it  44%,  or  a  reduction 

of  15%. 

"On  paper  and  books  you  taxed  them  21%.  We  tax  them  12%,  or  a  re- 
duction of  45%." 

The  following  quotation,  from  the  Literary  Digest — Sept.  2,  1922 — 
shows  the  increase  in  rates  made  by  the  Fordney-McCumber  Tariff  over 
the  rates  in  the  Underwood  Tariff: 

"The  new  tariff  bill,  the  New  York  Evening  Post  (Ind.)  has  said, 
'makes  the  free  breakfast  table  a  mockery,'  and  in  this  paper  Mr.  William 
O.  Scroggs,  the  economist,  recently  recounted  'the  short  and  simple  but 
somewhat  intimate  annals  of  a  morning  hour  in  the  life  of  a  plain  middle- 
class  American  consumer,'  to  'see  how  the  tariff  penetrates  into  the  inner 
temple  of  his  existence.'  To  quote  from  this  story  as  amended  by  Mr. 
Scroggs  to  fit  the  final  form  of  the  Senate  Bill: 

"  'His  day  begins  when  he  is  aroused  by  an  alarm  clock,  and  the  new 
tariff  bill  raises  the  duty  on  this  article  67  per  cent.  His  first  act  is  to  throw 
off  the  bed-covering,  on  which  the  duty  has  been  increased  60  per  cent.  He 
jumps  from  his  bed,  on  which  the  duty  is  advanced  133%,  and  dons  a 
summer  bathrobe,  with  the  duty  up  60  per  cent.,  and  slippers,  with  the 
duty  increased  33  per  cent. 

'He  walks  over  a  Brussels  carpet  (duty  up  100  per  cent.)  to  close  the  win- 
dow, the  duty  on  the  pane  of  which  has  been  raised  33  per  cent.,  and  adjusts 
the  shade  (duty  up  20  per  cent-.)  and  curtains  (up  50  per  cent.).  Then  he 
enters  the  bathroom,  stands  before  a  mirror,  on  which  the  duty  has  been 
raised  100  per  cent.,  sets  out  his  shaving-stick,  subject  to  an  increase  in  duty 
of  67  per  cent.,  his  shaving-brush  (duty  up  30  per  cent.),  and  razor  (up  100 
per  cent.),  and  begins  his  tonsorial  operations.  This  over,  he  devotes  his 
attention  to  the  bathtub,  on  which  the  duty  has  been  raised  100  per  cent. 
Towels  (with  the  duty  up  60  per  cent.),  soap  (up  67  per  cent.),  tooth-brush 
and  hair-brush  (up  30  per  cent,  each),  and  comb  (up  67  per  cent.)  are  next 
in  demand. 

'As  our  comsumer  dresses,  it  may  be  noted  that  the  new  bill  increases  the 
duty  60  per  cent,  on  his  underwear,  33  per  cent,  on  his  hose,  15  per  cent,  on 
his  shirt  and  collar,  20  per  cent,  or  more  on  his  necktie,  and  60  per  cent,  on 
his  suit  of  clothes. 

'Our  consumer  decides  to  discard  his  waistcoat  and  transfers  fountain-pen 
(up  100  per  cent.),  penknife  (up  200  per  cent.),  and  lead  pencil  (up  80  per 
cent.)  from  waistcoat  to  coat-pockets,  picks  a  fresh  linen  handkerchief  (up 


Payne-Aldrich,  Underwood  and  Fordney  Tariffs  99 

30  per  cent.)  from  the  dresser  (up  133  per  cent.),  polishes  his  eyeglasses  (up 
15  per  cent.),  and  after  giving  his  clothes  a  touch  with  a  brush  (up  57  per 
cent.),  is  ready  for  breakfast. 

*At  the  breakfast-table  our  consumer  spreads  a  napkin  (duty  up  15  per 
cent.)  on  his  knees,  and  turns  on  the  current  for  his  electric  toaster,  on  which 
the  duty  has  been  advanced  160  per  cent.  He  drinks  water  from  a  glass, 
on  which  the  duty  is  45  per  cent,  higher,  and  begins  his  breakfast  with  an 
apple  (duty  up  200  per  cent.)  baked  with  sugar  (duty  up  84  per  cent.)  in  an 
aluminum  dish  (up  150  per  cent.)  on  a  cast-iron  stove  (duty  up  100  per  cent.) 

'The  duty  is  also  advanced  27  per  cent,  on  his  chinaware,  20  per  cent,  on 
his  table  silverware,  200  per  cent,  on  his  oatmeal,  and  225  per  cent,  on  his 
butter.  The  cream  for  his  coffee  has  been  removed  from  the  free  list  and 
subjected  to  a  duty  of  22  H  cents  a  gallon,  and  his  eggs  also  have  been  taken 
from  the  free  hst  and  made  dutiable  at  8  cents  per  dozen.  The  salt  for  his 
eggs  likewise  comes  off  the  free  list,  and  so  does  his  bacon  and  the  flour  that 
goes  into  his  bread.  Even  the  duty  on  the  salt-shaker  gets  a  boost  of  45 
per  cent. 

'The  only  things  on  his  table  that  have  not  been  subjected  to  a  higher 
tariff  duty  are  his  coffee  and  his  drinking-water.'  " 


100  TARIFF  PRIMER 


THE  SCRAMBLE  BEGINS  FOR  STILL  HIGHER  RATES 

The  Fordney-McCumber  Tariff  did  not  settle  tariff  rates.  It  just  unsettled 
them.  No  one  can  tell  what  the  tariff  rates  will  be  on  a  single  article — 
except  dyes — three  months  ahead.  This  for  the  reason  that  the  Fordney 
Tariff  gave  to  the  President  the  unparalleled  power  to  raise  or  lower  the 
rates  on  any  product  50%.  It  did  more.  It  gave  him  the  power  also  to 
change  the  present  basis  of  Foreign  Valuation,  to  American  Valuation. 
In  making  this  shift  alone — without  adding  additional  tariff — he  can  often 
change  rates  fully  60%,  and  in  some  cases,  100%. 

As  showing  the  workings  of  this  unprecedented,  and  probably  unconsti- 
tutional, procedure,  I  will  give  clippings  from  an  article  I  find  in  the  New 
York  World,  just  as  the  book  is  going  to  the  printer's: 

TARIFF  GLUTTONS  HUNGER  FOR  MORE 

{Special  to  the  N.  Y.  World) 

WASHINGTON,  Oct.  12.— Seekers  of  still  further  tariff  bounties  already 
are  pressing  the  United  States  Tariff  Commission  to  take  advantage  of  new 
provisions  of  the  Fordney-McCumber  act  whereby  the  President  is  allowed 
to  jack  up  rates  by  50  per  cent.,  if  he  deems  it  necessary,  in  order  to  "equalize 
production  costs  here  and  abroad." 

Upward  of  fifty  notices  have  been  entered  with  the  commission  so  far  by 
beneficiaries  of  the  new  tariff  who  want  additional  concessions  that  will 
shut  foreign  goods  out  of  the  American  market  and  thereby  permit  of  higher 
prices  for  domestic  articles.  Many  verbal  communications  also  have  come 
in.  The  commission  inteiprets  this  early  stream  of  applications  to  mean 
an  ensuing  fioodtide  that  not  only  will  swamp  the  commission  with  work 
but  necessitate  at  least  a  doubling  of  its  expenses. 

Woolen,  cotton,  steel,  chemical  and  other  manufactuiers  are  among  these 
first  applicants  for  bigger  benefits  at  once,  not  being  satisfied  with  the 
already  unpreiedenledly  high  tariff  rates. 

The  ne'v^  law  specifies  that  the  Commission  must  hold  hearings  on  these 
applications  and  then  determine  the  actual  difference  between  the  cost  of 
production  heie  and  abroad.  According  to  veteran  experts  of  the  commis- 
sion, this  is  impossible,  to  begin  with,  since  production  costs  not  only  are 
fluctuating  rapidly  because  of  present  unsettled  economic  conditions,  but 
foreign  manufacturers  both  resent  and  forbid  such  prying  into  their  secrets. 

Although  the  commission  is,  in  theory,  an  impartial  judicial  body,  its 
members  are  not  blind  to  the  tremendous  political  power  which  the  Fordney- 
McCumber  bill  confers  on  the  President;  and  since  the  clarnor  for  readjust- 
ment by  Presidential  proclamation  already  has  started,  reinforced  by  poli- 
tical pressure,  expectations  are  that  the  commission  will  find  itself  FORCED 
INTO  APPROVING  CONSTANT  INCREASES,  OR  ELSE  HAVING 
ITS  RECOMMENDATIONS  OVERRULED." 


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